I’d probably be pretty accurate in assuming that most of you reading this don’t have the best “relationship” with money!
For most it’s a way too complicated topic that exhausts you just thinking about it!
Knowing about finance (anything related to budgets, money, etc.) is an important life skill that everyone needs to know, even if we don’t like it all that much!.
If adults aren’t properly taught the value of a dollar when they are young, they’ll grow up having financial troubles and can wind up owing thousands of dollars in debt.
Unfortunately, many schools don’t focus on financial education, so it’s 100% up to us parents to start teaching our children important financial lessons that will help them become financially responsible adults later in life.
Parents can actually start teaching their kids about money as young as three years old! At this age, they can understand the basics around saving and spending money.
According to a report by researchers at the University of Cambridge, kids have formed their lifetime money habits by the time they are 7 years old! SEVEN! So get the information in there while you can to help your child feel good about their relationship with money, and take that stress out of their adult lives because of it!
Check out this age-by age breakdown of what type of financial knowledge parents should instill in their children so that they grow up knowing the value of a dollar!
Teaching Kids The Value Of A Dollar
3-5 Years Old
Between 3 and 5 years of age, children should understand the concept of waiting to buy something they want. Delayed gratification is something that’s hard for kids of all ages (and many adults!), but it can be taught!
Children need to learn that if they really want a toy, they must wait and save up to buy it. You aren’t going to be supporting them financially forever, so teaching them about saving will be very beneficial later in life.
Teach children about money when you’re out at the store shopping! Show them that you only have a certain amount of money and need to buy necessities, and that if you buy that toy they want, then you wont have enough for the food items on your list!
Kids need to learn early on that they won’t always leave a store with something for them. The earlier kids realize this, the less tantrums you’ll see at stores (BONUS!).
Try setting up three jars for your child, and titling them “Saving”, “Spending”, and “Sharing”. Then every time they get money for something (or find it, I swear Maddie’s got a built in metal detector in her!), they must divide the money equally into each jar.
They can use the “Spending” jar for small items they want, and the “Sharing” jar should be used to donate or to give to a friend’s cause (another important thing for them learn early!). Have them set larger goals for items they want and teach them to save up their money in the “Saving” jar for these more expensive items.
6-10 Years Old
When children are between the ages of 6 and 10, they have a better understanding about money, so the focus at this age needs to be making choices about how they want to spend their money. Teach them that they must make wise choices when it comes to spending money, because once it’s gone, it’s gone!
To teach kids this age about money, include them in some of your financial decisions, and talk to them about why you buy some items over others when you’re at the store. Explaining to them that some items are less expensive than others, waiting for items to go on sale, etc.
Giving your child a few dollars when you go to the store and letting them make choices about what to buy/what to do with the money is also a great exercise (you’d be surprised how often they decide to save it!). This is the age to arm them with information!
11-13 Years of Age
As they get older, you can start talking to them about saving for long-term goals, while introducing things like interest. Describe to them about compound interest ( as best as you can anyway!) and how they’ll have more money in the long run if they save for a longer period of time.
Ask them to set their own long-term goals for their money. Talk about the harder side of saving as well, and some of the things that they are giving up when they decide to save their money.
14-18 Years of Age
These years are essential to instilling good money habits in your child, because soon they’ll be adults and will have responsibility over their own money.
This is also the time when you’re probably looking at colleges, so it’s important to talk about how much you can contribute to their college fund. If they have a part-time job, they must learn that some of that money will have to go for paying for the remainder of college expense in the near future, too.
Above all else, as with any other lesson you hope to teach your children, lead by example!
These lessons about saving wont really hit home if you are constantly spending on things you don’t need/use and are broke all the time!
How Are You Teaching Your Kids The Value Of A Dollar?
Share in the comments below!
This post may contain affiliate links, from which I earn a small commission. You will not be charged any extra by purchasing through our links, but will help in maintaining this blog. Thank you in advance for your support! You can learn more here