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5-10 years Old
Young children love to collect and save
pennies. They rarely learn to understand their value until they get toward
the older end of this age range. To help them out, families can talk about
the family’s budget together. This doesn’t mean worrying children about the
bills or making them feel guilty for costing you so much. What it does mean
is explaining that there is a certain amount of money that comes into the
household and that there are some expenses, such as food, utilities and
clothing that must be paid for from that money. |
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There is also a set amount (you don’t need to say how much) that must be saved
for emergencies and future expenses. By setting up a “family piggy bank” you can
illustrate what it is to save for something fun for the whole family.
Children who get an allowance should have it explained to them what they will be
required to use it for. You can teach children to always put 10% of their
allowance in savings, another amount toward a charity, and then the rest is for
their spending. Let the children see when they earn interest on their bank
accounts too.
11-15 Years Old
Children in this age group may have more opportunities to earn some money. If
they are asked to feed the neighbor’s cat and earn $10, teach them again to put
a percentage away into savings. This is also a good age to take the child to the
bank and open their own savings account.
If the habit of putting money into savings each time they are paid is
established early then it will be more likely to become a lifelong way of
managing money. Allowances may or may not be tied into chores, but it is
important that children this age understand the importance of “earning” their
incomes just like Mom and Dad do. The allowance can also be approached as their
share of the family’s income. Again it should be explained what they must buy
for themselves from this income – music CDs, movie tickets, extra unnecessary
clothing, etc.
16 and Older
Many teens have part-time jobs and can really understand what it means to earn a
living. They will also be introduced to the concept of paying taxes. This is a
good time to teach them to manage a checking account and ATM card. They can also
be taught to plan ahead for major expenses such as their first car or education.
Teens can become more responsible for buying some of their own clothes and other
necessities. It will help them appreciate how much things cost and perhaps take
better care of their belongings.
No matter the age of your children, they can be part of a family meeting to
decide how some of the discretionary income is to be spent. Having a part in the
decision making will help them understand the value of money and that there are
often limits on spending so some purchases must be deferred.
Next,
see our teaching money skills page for more
information on teaching money skills.
More kids and money information
 To learn money skills, personal finance, and money
management, please go to the Money
Instructor home page.
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Help
your child learn money skills.