In our last blog, we talked about ways to teach your pre-schooler about money. As your child moves into elementary and middle school, you can continue the education with these tips:
Pay your child for jobs they do rather than giving them an allowance.
At this age, they could be vacuuming, cleaning the bathroom, cleaning out the garage or helping with yard work.
Help your child create a budget for the money they are earning.
- Fun activities
- Giving to others
Take them to the bank to open a savings account for the money they have earned.
Ahead of time, ask the bank if they can take time to explain what happens to the child’s money when it is deposited. Perhaps the bank will give your child a tour of the bank. Each time your child makes a deposit or withdrawal, help them track how much money is in their account.
Similar to the pre-schooler, when your elementary age child asks you to buy them something, suggest they save their earnings so they can purchase the item themselves. This will help them learn the concept of delaying gratification and will help them avoid impulse buying.
When your child is saving to purchase something, help them create a savings timeline showing how long it will take them to save the money.
As their savings increase, record it on the timeline so they can see how much longer before they will be able to purchase the item.
At this age, children can understand the concept of opportunity cost; “If I buy this, I won’t have enough money to purchase that.” For example, your child has $25 saved towards a $50 pair of shoes they really want. They see a new video game that costs $20 and they want to spend part of their $25 on the video game. You can use the savings timeline to show them how much longer it will take to save the money for the shoes if they buy the video game. This process can also help your child avoid impulse buying.
Ask your child to help you prepare the grocery shopping list.
Take them with you to the store to do the shopping. While in the store, have them keep track of the cost of the items using a calculator. This will help them get involved in the family finances.
Of course, as mentioned last week, the best learning tool is leading by example. When you begin teaching your kids about money early on, you can help them grow into financially responsible adults. In our next blog, we’ll discuss money lessons for older children as they move into high school and have more opportunities to earn (and spend!) money. If you have any questions about raising money-savvy kids, please feel free to reach out. I’d love to help!Judith Ackland has more than 26 years of experience in accountancy and financial planning, including seventeen years as a CFO of a diverse business. She started Crystal Financial in 2010 to help a wide array of individuals, families, and business owners better understand their finances and how good financial management could help them achieve their goals. Judith has an MA in Professional Accountancy from the University of Nebraska at Lincoln as well as a Certified Public Accountant Certificate and a Certified Financial Planner designation.