It's never too early to start teaching kids about money. Grade-school age is a perfect time for teaching kids about money since children are learning addition, subtraction, and other math concepts at school. Parents can establish some important fiscal skills, such as saving, even with younger grade-schoolers. As children get older, they can begin to make some decisions about money, such as deciding how to spend their allowance or even helping you decide how to allocate money for things to do while on vacation. Here are 10 smart tips on teaching kids about money:
1. Play games that have to do with teaching kids about money.
Board games such as Monopoly and Life can be a fun way for kids to learn about money. So gather your whole family around your favorite game and let your grade-schooler unleash her inner mogul.
2. Take your child shopping.
Teaching kids about money can be a part of regular household routines such as going to the grocery store. Tell your child what your budget is and make a game of buying what you need under that set amount. Clip coupons, and let your grade-schooler help you find items on sale. A 9- or 10-year-old can take a calculator and help you keep track of your purchases — and figure our how much you saved.
3. Give him an allowance.
By grade-school, kids are able to do more chores to help around the house. Whether or not you tie chores to an allowance, it's a good idea to get your grade-schooler into the habit of managing his own money.
4. Encourage her to save.
You can use a cute piggy bank you pick out together or a favorite Hello Kitty wallet — whatever it is, designate a place where she can keep her money. Some experts suggest giving your child three different receptacles to put her money — one for saving, one for spending, and one for donating to a charity. Then, you can decide together how to divide up her weekly allowance amongst the three jars.
5. Take it to the bank.
Go with your child to the bank and open up an account. Explain to him that his money will grow when he leaves it in the bank.
6. Teach her how to talk about money.
My 7-year-old once asked someone we know how much money she made. It was an innocent question — grade-schoolers are often curious about things like how much someone's house cost or what someone's salary is. But they usually have no concept of what that number may mean (one of my son's friends once declared that his parents paid $500 for their house!). Gently explain to your child that it's not polite to ask people how much money they make or spend on things.
7. Curb TV time.
Kids can be subjected to an amazing amount of commercials in a very short span of time. Adults have trouble fighting the influence, so how can you expect a 10-year-old — much less a 5-year-old — to be immune to the enticing allure of the latest toy or kid-gadget?
8. Explain credit cards and ATM cards.
Younger grade-schoolers may think that money comes out of ATM machines or that you can simply pay for things with a credit card. Even older grade-schoolers may not fully understand what it means to use credit (that paying for things with a card can often mean paying interest).
9. Set a good example.
As with so many things, what you do matters. Never lie about purchases to your spouse. And always put purchases into context, emphasizing that things are not what make people happy. Remind him that there are far more valuable things — like spending time together — that don't cost a thing.
10. Teach generosity.
No lesson about money is complete without some discussion about charity. Help her put money in perspective by showing her that there are many other things — such as love of family and our fellow mankind — that are invaluable.