Teaching kids about money and finance is a crucial life skill that can set them up for financial success in the future. Whether you are a homeschool parent or if your kids attend a traditional school, it is so important to help kids understand the value of money and how to be a good steward over their finances. Most schools and homeschool curriculum companies do not prioritize financial literacy in a way that is both comprehensive and accurate. So many adults today are deep in bad debts and not saving money for retirement or future expenses. We parents can help our kids avoid this future and set them on the path to success by guiding them along the way. Let’s explore the key concepts kids should learn about money as they get older and ways we as parents can help our kids along the way.
Preschool (Ages 3-5):
- Identifying Coins: Introduce different coins (pennies, nickels, dimes, and quarters) and their values. Play games to help them recognize and differentiate between coins.
- Saving: Teach the concept of saving money by using clear jars or piggy banks. Encourage them to save coins they receive as gifts or find around the house.
- Simple Transactions: Let them “buy” things from a pretend store using play money. Teach them the process of giving money in exchange for items.
Early Elementary (Ages 6-8):
- Earning Money: Talk about how people earn money through jobs or chores. Consider giving them small allowances for completing age-appropriate tasks.
- Budgeting: Teach them to divide their money into three categories: saving, spending, and giving. Discuss the importance of budgeting and setting aside money for different purposes.
- Needs vs. Wants: Help them distinguish between essential needs (food, clothing, shelter) and wants (toys, games) when making purchasing decisions.
Late Elementary (Ages 9-12):
- Setting Savings Goals: Encourage them to set short-term savings goals, such as buying a toy or going on a trip. Teach them to allocate a portion of their allowance or gifts towards those goals.
- Comparison Shopping: Teach kids to compare prices and look for deals when shopping. Discuss the value of money and how different choices affect their budget.
- Delayed Gratification: Discuss the idea of waiting before making a purchase, helping them understand that waiting can lead to more significant rewards or better deals.
Early Teens (Ages 13-15):
- Bank Accounts: Introduce the concept of a savings account and discuss the benefits of keeping money in the bank. Teach them how to make deposits and withdrawals.
- Earning Opportunities: Encourage them to explore entrepreneurial endeavors or part-time jobs to earn money beyond allowances.
- Understanding Interest: Explain the concept of interest and how it affects savings and loans. Discuss the importance of saving and investing for the future.
Late Teens (Ages 16-18):
- Budgeting for Larger Expenses: Teach them about budgeting for bigger expenses like a car or college tuition. Discuss the potential long-term impacts of financial decisions.
- Credit and Debt: Introduce the concept of credit, credit cards, and the importance of responsible credit use. Discuss the consequences of accumulating debt.
- Long-Term Financial Goals: Encourage them to set long-term financial goals, such as saving for higher education, buying a home, or starting a business.
- Financial Independence: Discuss the importance of financial independence and making wise financial decisions as they enter adulthood.
Final Thoughts
Teaching kids about money should be an ongoing and age-appropriate process. Encourage open conversations about money matters and lead by example to instill healthy financial habits early on.
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