Teaching Kids About Money Management

As summer rolls around kids are usually excited to earn (or spend) money. From lemonade stands to summer jobs, it’s always great to see their desire for earning money. And with that drive, it’s also a great time to enforce good financial habits, like saving.

Here’s some quick tips on how to support and teach your children about savings.

Younger Children (Ages 4-6)

At this age, visual learning is the best. While every kid likely has a piggy bank, if they can’t see their savings growth, it’s harder for them to understand. Instead, consider using clear jars. One for savings, one for giving, and one for spending. When they earn money, they can divide it between these three jars.

When you go to a store, have your child bring a certain amount of money with, especially if they are always asking for you to buy them something. If they ask for a small toy, tell them that they will have to use their own money. Not only does this provide them with an opportunity to make a decision (spend or save), but if they choose to spend, they are experiencing how money works.

Elementary Children (Ages 7-11)

As kids get older, so does their grasp of money. At this age, you may be assigning chores and duties around the house that they can earn money for. Make sure this is an opportunity for them to understand that money is “earned” not “given”.

At this age, and older, many kids start experiencing impulse buys. Modeling good behavior is the first step to teaching. Avoid impulse buying yourself and then put in some rules for kids to follow, such as waiting 24 hours to think it over.

At this age, it’s also important to teach them needs versus wants. Impulse buys are always wants and typically from someone else’s influence. Having them pause on their purchase can support their awareness of this to make the best decision.

Depending on your child and how much money they are saving, this may also be a good time to open a bank account for them.

High School (Ages 14-18)

At this age, children understand the basics. But what they really need support in is being responsible with their money, especially if they are earning at a summer job or looking to save for college, a car, etc.

If you haven’t done so, this is the time to open a bank account for them and show them the ropes of managing it. You can help them set up different savings accounts, such as one for college or a vehicle, so they can learn how to start saving for these bigger purchases.

While they likely won’t experience it at this age, one important lesson for you children is the danger of credit cards. Informing them early is important to teach them about debt and how they can best manage their money with the need of credit cards.

This is also a good time to help them establish a budget. They likely have consistent purchases, like gas, food, entertainment, etc. Sit down and work out a simple budget with them to follow to get them in the habit of tracking. Doing this before college will be a big benefit to them and help them make better money decisions.

Looking for a way to engage your children in financial literacy learning? Our Zogo app is a great way for children to learn key money management skills while having fun and earning rewards. These bite-sized, gamified lessons will keep your kids motivated and learning.

Connect with us today to learn more about Zogo and how to support your children in their future financial success.

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