Financial Education for Kids Under 10
Financial Lessons for kids younger than 5 years old
You can start teaching kids to save money when they’re as young as 3 years old. The best way to start is to spend time building skills around delaying gratification. These financial lessons don’t even have to be learned in connection with money; helping your child wait for a turn at the playground, for example, is a great way to instill the values of patience and anticipation. The more your child practices delaying gratification, the easier it will be for him or her to understand the concept of saving up for something special later.
Help young kids separate their allowance earnings into saving, spending, and sharing categories. (Read more about setting up a successful allowance program.) Help your kids count up their savings and talk to them about setting goals for future purchases. Encouraging them to choose a goal that can be attained relatively soon will help avoid frustration.
Financial literacy for kids 6-10 years old
Build on earlier lessons by including kids that are 6-10 years old in financial decisions. At the store, explain why you’re buying one brand over the other, to demonstrate the correlation between value and cost. Be vocal about your decision process as you’re shopping; ask questions like, “Do you think we really need this?” or “Which of these is the better deal?” Allow your kids to participate in decisions and experience making choices. A good way to do this is to give them a few dollars and the freedom to choose vegetables or fruit for a meal while staying under budget. When it comes time to check out, let the kids hand your money to the cashier. It’ll help them get comfortable with the interaction.
Keep up with the allowance tactics you used when kids were younger, including emphasizing the importance of a savings plan for your child. A savings account for kids is a great idea once they start school; they have the opportunity to save even more money when they get good grades with the All-Stars Youth Savings Account. Every report card with an “A” earns a $5 bonus, and compound interest means your child’s savings will grow along with them.