Teach Your Kids About Money Now!

Teaching your kids how to save and spend is one of the most important lessons they will ever learn, and it’s important to start early. Today’s teenagers collectively spend billions of dollars a year, and a third of high school students already have at least one credit card. Without the proper foundation, your kids may join the roughly 20 percent of college students already filing for bankruptcy because of overwhelming credit card debt.

So, what money skills do you teach at what age? Each child is different, but here are some guidelines that may help.

Pre-School

By about age three, you can start with counting. Start by letting them count five or 10 pennies while dropping them into a jar. Keep adding to the jar every few days or once a week and let them watch the savings grow. As the jar starts to get full, take them to a store to pick out a very cheap toy. Remove the amount of pennies it takes to pay for the toy, and show them how much more empty the jar is because they spent the money. As they get to Kindergarten age, use the pennies to help them understand the value of different coins. For example, take out 10 pennies and put them next to a dime to help them understand how many pennies it takes to equal that dime.

Grade School
This is a good time to start helping them understand the concept of earning money. Choose odd jobs around the house like feeding the dog or emptying the dishwasher and pay them a small allowance. Make them buy some of their own toys with the money they earn so they truly understand how much they have to work to earn the things they want. Teach them how to shop around to get a better price.

Middle School
Help them open a youth account with a checking account, savings account and debit card. Be sure they understand the difference between a debit card and a credit card, and teach them how to balance their account as they deposit and withdraw money. This is also a good time to start teaching them how to make a budget.

High School
Now is the time to teach them about interest rates, loans and credit cards. By the time they graduate, they should be prepared to spend and save responsibly.

It’s also important to have good money habits yourself. Kids look to their parents for money advice more than any other grown-up. If you aren’t practicing what you preach, you may be sabotaging your own efforts to raise them differently.