Teaching Your Child About Money

Teaching your children about money may seem like a daunting task. By instilling good spending and saving habits from a young age, you can ensure your children have the financial skills needed to navigate everyday situations in adulthood. So here are some simple, age-specific recommendations on how you can teach your children to be financially responsible!

Lesson: Identifying Money (Ages 2-3)

Play store to understand the basics of commerce. With close supervision, help your toddler identify and use coins to “buy” items in your home.

Lesson: Delaying Gratification (Ages 4-5)

Kids are most susceptible to everything you tell them at this age, so make sure you teach them good habits now. Open a Firstar Savings account and give them some money to put into it. If they receive money for gifts, make sure to show them to save some of that as well. Once they have enough saved, then they can use their savings to purchase what they want.

Lesson: Making Choices (Ages 6-8)

Include your child in decision-making. When shopping, explain why you chose the generic brand or bulk item. Discuss needs versus wants. Let your child experience financial choices by handing over a few dollars and asking him or her to choose which item to buy. Children in this age range are just starting to care about things like the latest toys and specific clothing brands, and now is a good time to help them learn the value of money.

Lesson: Growing Money (Ages 9-12)

Pre-teens are looking for some independence, and getting their first “job” might be a perfect way to do so. They can mow the neighbor’s lawn, babysit their cousins or shovel snow for Grandma. Have them come up with ideas that suit their interests, and propose these money-making endeavors to their possible “employers”. Kids in this age range are ready to learn about the onslaught of credit cards – and how dangerous it can be to spend over the amount of money you know you’ll make to pay off your bill. Start introducing complex ideas such as interest, investments and the time value of money. Have your child set longer-term goals and set a budget to reach them.