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Teaching Kids About Money

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Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.

Did you know that a 2013 University of Cambridge study found that many of our money behaviors are formed by the time we are seven years old? No wonder it’s so important to talk to kids about money. For a lot of us, it’s difficult to know where to start…but getting started is so important. Stop wondering how to teach kids about money and start teaching today with these tips!

How Do You Start Teaching Kids About Money?

Let’s get this out of the way from the start: Don’t stress over the age of your children. Whether you have young kids or teens, we can help you start those money conversations.

First, we break down some universal aspects of quality money conversations and then look at ways to apply them to specific age groups. Let’s dive in!

Tips to Start Teaching Money Today

Not sure if you’re ready to talk about money? Your kids are! Whether you know it or not, they’ve already learned a lot about money from your family.

They watch your money habits–how you spend money and manage it. They have a sideline seat to all you do. This is not said to scare you, but to empower you. What you do and do not do with money impacts their money views. After all, there’s no teacher quite like the real world.

Here’s how to teach kids about money today!

Tip 1: Have Open and Honest Conversations Whenever You Can

No one manages money perfectly. In fact, making money mistakes is often how we, as adults, learn to manage our finances better. No matter where you and your family are on your financial journey, don’t hesitate to talk about money.

Some topics to consider include:

  • Grocery shopping and meal planning.
  • Savings goals you can set as individuals or as a family.
  • Various bills and other commitments you might have.
  • Wants versus needs when planning a purchase.
  • Planning ahead for the month and considering what events, such as birthdays or holidays, are coming up.

Tip 2: Make It Personal and Age Appropriate

Don’t worry about sharing mortgage amortization schedules with your 1st grader. Instead, look for ways to meet them where they are with money.

How can you make money real and relatable? Think about their interests. Is there a way to encourage them to start saving for a particular item or experience? Brainstorm ways to generate income.

Need ideas to start the conversation? Grab 102 Business Ideas for Young Entrepreneurs here.

Tip 3: Use Money Words Purposefully

One reason adults have hang ups around money stems from the fact that it is either not discussed growing up or is only discussed negatively.

Try to be neutral when talking about money and use precise language. Even the youngest of kids can be introduced to terms like needs versus wants or saving, spending, and sharing. As kids get older, you can start using phrases like delayed gratification, budgeting, and compound interest.

Feel like you want to get better with your own finances? Sign up for FI101, our free adult financial literacy online course.

Tip 4: Let Them See Money in Action

First-hand experience offers an excellent education. Start making money moments more transparent and talked about. Here’s how:

  1. Make a list of money related tasks you perform on a weekly basis.
  2. Underline the ones you can do with your child or teen.
  3. Talk about what you’re doing as you take action together.

Maybe it’s making a grocery list, looking through weekly ads, or putting stamps on bills. By intentionally explaining what you’re doing and why, children and teens can get a deeper understanding of how money impacts our lives every day.

To make it fun, you can also play games with monetary systems attached. Set out the Monopoly board and have conversations as you play!

How To Teach Kids About Money By Grade Level

If you are ready for some age-specific actionable ways to teach kids about money, we’ve got just the starting place for you.

Preschool

We know what you’re thinking. Preschoolers? If you’re asking how to teach kids about money, it’s important to know that age is just a number! Almost any child–even young children like preschoolers!–are ready to grow their financial literacy.

Save, Spend, Share Jars

Give your preschooler three clear jars. As they interact with money–whether it’s a gift, an allowance, or coins they find on the sidewalk–provide as many opportunities as possible for preschoolers to interact with actual coins and bills. Let them dump, group, and sort the coins by color, size, value, and quantity. It’s all about exploring. If they like to put things in their mouth, supervise this hands on play more closely, but let this hands-on play take place.

Then, you can gradually start to have conversations about which jar to use. Maybe they are saving for later or spending on things they might want now, so they use their Save and Spend jars. A Share Jar is also a great way to plant the seed for charitable giving by using a phrase that is more recognizable at an early age.

Role Play

Our young kids are brimming with creativity and imagination. The way they process and make sense of the world is to play it out. Help them to recreate everyday financial moments in our lives such as shopping for groceries or gifts, going to the bank, using a cash register to pretend to be a seller, write checks, and so on. Your kids will often come up with the situations, and you just need to play along! Consider adding some resources such as play money, a cash register, and a piggy bank to your child’s play area.

Early Elementary

As kids get a little older, money management becomes even more concrete. One of the best ways to help them learn to manage money is to show them different ways that you spend money and save money. Here’s how to help them understand the value of a dollar!

The Estimation Game

When your child talks about wanting something, have them estimate how much it might cost. Then, you can research prices and sales together.

If your child grocery shops with you, you can play the estimation game at the grocery store, too. They can start with individual items and eventually round and estimate the cost of all the groceries by the time you get to checkout. Afterward, you can look at the receipt together and start to discuss sales tax, coupons, and more.

If you shop at different stores, encourage your child to start to monitor the price of an item from store to store. How is it the same or different? Start to point out the different quantities and unit pricing, as well as making comparisons between store brands and brand-name products.

Upper Elementary

Ready to add another layer of authentic money conversation to your household? Upper elementary students can start to handle multi-step money conversations as their thinking becomes more complex and abstract.

Meal Planning

Meal Preparation is a perfect way to teach kids about money. Food is one of the top three expenses in anyone’s budget. You have to eat to survive, and your children already see you making decisions around food every day.

Talk to your children about what you are doing. Involve them in making grocery lists and selecting recipes. You can also have them help you shop and put away groceries. That way, they can see the cost and quantity of the ingredients and start to think of how they can be used in multiple ways. Imagine if we all learned how to combat food waste at such a young age! What a cost savings and an eco-boost we would all enjoy!

For more support with meal planning, join our free Meal Planning Made Easy Course for 3rd-5th Graders!

Middle School & Beyond

Worried that tips about how to teach kids about money might not apply to a preteen or teenager? Never fear! If you haven’t talked about money much, your middle and high schoolers have still been learning. Plus, they’re at a stage in life when they can really start to access financial tools.

Open An Account Together

One of the best ways to help middle and high school students understand money is with an official financial account. Depending on your family situation, that might mean opening up a savings account together and creating syncing funds for various goals. If your teen earns an income, you could also help them start a Roth IRA. Any account that earns any kind of interest is a powerful way to help them see money growing and working for them.

Check out Money Crashers article, 10 Best Bank Accounts for Kids Under 18 (Checking & Savings) – Rates for 2021, to see your options for best checking and savings accounts for kids under age 18.

Teaching Kids About Money at School

Currently, only 21 states require young kids and teens to learn about money. Of those states, only six require standalone personal finance courses. But financial literacy is crucial for all young people. That’s why it is important for families to reach out to their school districts to ask how personal finance and financial literacy are addressed.

Of course, most schools struggle to fit in new curriculum. Many times, adopting a new curriculum can be cost-prohibitive, especially for districts that are already strapped for funding. Then, there’s the fact that schools and teachers have to cover state requirements first.

All of these reasons motivated The ChooseFI Foundation to shape a PreK-12 curriculum that is totally free and can be integrated into any content area. If your school can offer a standalone personal finance class, that’s amazing! But we have lessons, projects, and full units that fit inside math, language arts, and social science classes.

To help strengthen your children’s financial literacy, share our free PreK-12 curriculum with your local school district. We’d be happy to walk them through all of our offerings as well over the phone or with a virtual meeting.

Closing Thoughts on How to Teach Kids About Money

Preschooler, child, preteen, teen–no matter the age, kids’ behaviors are all affected by the information they receive. What we are taught as young kids drives the choices we make later in life–good or bad. That is why using these tips on how to teach kids about money are critical for them to boost their financial literacy now.

When we encourage our children to become financially literate from an early age, and they see us model these behaviors, we set them up for financial success in the future.

If you have an upper elementary learner at home and want a high-interest, hands-on way to grow their financial literacy, check out our course designed just for them! Financial Literacy Made Easy is an interactive, self-paced course supported virtually by a licensed elementary school teacher from the ChooseFI Foundation team. It’s just one more effective way for you to start teaching your kids about money!

Interested in our Financial Literacy Made Easy course? ChooseFI blog readers can use the code FINLITREADERS10 for exclusive savings on that financial literacy boost.

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Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.
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