Smart Money Tips for Kids from 3 to 22

Without a foundation of financial competence, people run the eventual risk of squandering, spending, or squabbling over money. Because of this it is essential to impart financial competence directly and early.

Having an early and repeated exposure to real money, gives children a direct experience with money. Collect coins and sort them into various sizes so your children are introduced to money.  Have them count the total of different coins and bills as an arithmetic and financial exercise. The writer downer here is to introduce them to money itself. Kids relate to the direct experience with it.

Observe your children with money and let them experience it. Be informal yet frequent about your dialogue with them about it. Kids from 5-7 age love games. Games that involve bartering are great activities for them. In this age group introduce them to different ways money is used.  Remember the piggy bank? This is a great time to introduce the piggy bank to your children.

8-11-year old children are at a great age to experience setting limits and making choices. Delayed gratification is an important trait to develop. You may have heard of the Stanford experiments to determine the effect of immediate versus delayed gratification. Delayed gratification correlated with higher SAT scores. It also correlated with self- control.  In this age group, delayed gratification can be expressed in self-determined goals/objectives and even incentives from you.

Preteens love to make buying decisions. They can handle the concept of limits. Have them set limits for themselves. They can understand ramification and consequences to exceeding budgets. Have them make budgets, not as tedious chores, but as a fun activity with gratifying outcomes.

Teens feel the pressure of their peers. This need of belonging can tug at their financial behaviors. “But, you don’t understand, I need this…now!” is a common plea. Reinforce their sense of responsibility by having your teens communicate the “why” of their, a “why” with consequences. This is also a wonderful time to Introduce them to the concept of earning, trading talents and skills for money that does not come from a family member.

Spreading their wings and testing their independent lives, young adults are often thrown into a world of a financial tightrope on which they may feel unprepared to take on. They have so many needs and wants tugging at them. How do they decide when to spend, when to save, how to invest and donate?  This is a time for young adults, if they haven’t already, to identify what money means to them and set up a system they can follow to save, invest, donate, earn, and spend.

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