Good money management is critical to living a successful life. But how old should your child be before they are ready to start learning about money? Children can begin learning good money habits as young as three-years-old! At this age they can learn to be patient to wait for things and begin learning numbers.
As your child grows, you can introduce them to new habits such as the Save, Give, Spend jars to start them down the road to good budgeting practices.
Check out this chart created by PSECU, which includes age-appropriate, money management activities, games, books and tips.
Start Them Young
Your first step should be to teach your children about cash — including what each piece of paper and coin is called and how much they are worth. Once they can name each coin and each dollar bill, you can start teaching them about the basics of money.
Between the ages of three and five is a suitable time to start teaching them these basics. You can even set them up with small age-appropriate chores to allow them to earn their own money.
Step two is suitable for children between the ages of six and eight. Chores should still be a thing, giving your child the ability to earn their own money, but now it’s time to start teaching responsibility for their money. Help them set goals for what they want to do with their money, whether that’s saving up for a new game console or going to see a movie they’re interested in.
Now is a good time to talk about the difference between needs and wants and why you should always buy the things you need before you spend money on the things that you want.
This is also a good age to teach them about how to make change from various bills as well. As silly as it sounds, this clip from the SpongeBob cartoon is an excellent place to start. It’s goofy, but it shows you how many ways you can make change from a dollar in a format they can appreciate and understand.
Cash and Cards
For children between the ages of 9 and 11, it’s time to start teaching them about bank accounts. Explain how you can pay will cash, debit or credit card, and checks. Make sure your child understands the difference between debit and credit.
You may already have a savings account for them — if so, that’s a great start. Now is the time to teach them how to understand their account statement.
When your kid hits those teenage years, it’s time to start introducing some new concepts — like saving for big-ticket items and what are loans. Your child won’t have a credit card yet, but the earlier you start teaching them about how credit works, the less likely they’ll find themselves trapped by credit card debt as an adult.
Now is an excellent time to start saving for those big-ticket items, too — like their first car. It’s tempting to give them a car as a 16th birthday or graduation present if you have the means to do so, but having your kid save for their first car will not only teach them money sense — it will also make it more important to them and encourage them to take better care of it.
Your teenagers are nearly adults now, so between ages 15 and 17 is a great time to start talking about getting a job and teaching them some basic business sense. This is the best time to pick up a part-time job in the afternoons or on weekends — as long as it’s something that isn’t going to interfere with their schooling. A summer job is another great alternative.
This is also the time when you want to start teaching them about how to protect their identity and the dangers of identity theft.
Raising a child is a hectic time and teaching them about money management may seem unnecessarily while they are still at home. But the younger you begin teaching your children the more time they have to develop good money habits that will keep them on the right path in life.
Disclaimer: This post is sponsored by PSECU, a Pennsylvania-based credit union.