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Financially Educating Your Children – At Any Age

Teaching children about money is a great idea, no matter what age they are. From young children managing pocket money to helping teenagers plan their financial future, educating kids puts them on a far more solid footing than they would be otherwise and sets them up for financial success.

It’s also something we as parents often wonder about. How do I use an allowance strategically? What should I do to start my 8-year-old learning about money? How can I make this education interesting for my 13-year-old?

No matter what the age, the kids have lessons they can (and should) be learning. This article is going to overview some interesting ways to get your kids financially aware across the age groups.

What to do with…

Young kids (5-10)

Getting started young is a great way to ensure that your kids will grow up with good habits, not bad habits, and are already thinking about their finances. But there is only so much you can do with a young child, so how do you get started?

Well try letting them see you budget. They don’t need the dollars and sense, but let them see you mapping out expenses versus spending, and answer questions that come up for them at that point.

This is also a great age to start implementing an allowance. Allowances are a great way to give kids a small portion of their own money, and open the financial floodgates in terms of teaching. Encourage your child to save a portion of each allowance, and think about how much they plan to spend and on what.

They will make mistakes along the way, but they will also be learning that they are mistakes early enough on that they are sure to be better equipped for the later years in life.

The Middle Ages (11-15)

By this point in the game, kids are starting to look at money as a tool, a way to get what they want in life. Take this to your advantage. If they’ve started babysitting, encourage them to again save a portion, but also to think about their financial goals for the remaining amounts. They don’t have to spend it all, though it is easy enough to do, so teach them about habits like discipline and control in exercising good financial habits.

This is also where you can start introducing a slightly bigger allowance, with the understanding that they will be increasing their contributions around the house. Chores should be a regular part of weekly living, though they should not be tied to specific financial amounts (as this will encourage kids to think of chores as ways to get paid, rather than required contributions).

You can also begin to encourage them to cover their own luxury expenses (like movie tickets, or CDs). This will get them thinking about how to save up cash for their “expenses” and naturally introduces the concept of budgeting, even at this stage in the game.

The teenagers (16+)

At this point in the game your kids probably have some ideas about the value of money and what to do with it, but it doesn’t mean your job is done. Ask your teenagers about their financial goals, encourage them to make specific short and long term ones, and to save a portion of each pay check. If they’ve been paying attention so far, you’ll likely have a much easier time at this point, but it can still be hard as they first learn about how not to overspend.

Regardless of your children’s age, get them involved in thinking about their own finances. It may not seem like what you’re doing is important yet, but you’re laying a financial foundation – including one that is not stressed and keeps them out of trouble!