Understanding the value of money and how to manage it are crucial life skills. But at what age do children begin to learn about money, and how can parents and educators facilitate this learning process? Let’s take a look at when kids learn money and how they learn it.
Early Foundations
Children can start grasping basic concepts related to money as early as preschool age.
At this stage, they may begin to understand that money (play money like this) is used to buy things and that different coins and bills have varying values.
Parents can introduce simple activities, such as playing with toy cash registers or counting coins, to help children develop these foundational skills.
Don’t expect them to add the money or be able to return change though, at this age it’s all about being able to understand that different play money has different value.
Elementary Years
During elementary school years, children’s understanding of money becomes more sophisticated.
They learn about concepts like saving, spending, and budgeting.
This usually begins in schools as early as first grade and even kindergarten in some schools.
Parents can involve children in everyday financial decisions, such as planning a grocery budget or saving for a special toy.
It’s pretty easy to add up money with kids in order to see if they have enough to buy something.
For example, let them know the price of something is $10.00.
Now have them and you add up the paper bills to see if they can add up to $10.00.
In school during the elementary years they will learn to identify different coins and paper money as well as determining their value.
Teenage Years
As children enter their teenage years, their financial responsibilities and decision-making opportunities expand.
They may start earning their own money through part-time jobs or allowances and face choices about how to manage it.
It’s at this time that they really see the value of money.
My son was 11 years old when he started earning money for the first time by cleaning snow for neighbors and mowing lawns.
He really became reluctant to spend his money now that he was the person earning it.
The next skill he learned was the ability to go online and look for the lowest price for something he wanted to buy.
All good life skills, I’m very proud of him.
Parents and educators can help teenagers develop critical financial skills, such as creating a budget, understanding the basics of banking, and distinguishing between needs and wants.
Real-life experiences, such as opening a bank account or managing a checking/savings account, can be invaluable in teaching teenagers about financial independence and responsibility.
Some schools don’t teach this kind of stuff so as a parent you really need to.
Life Skills Education
Financial literacy is an essential component of life skills education, alongside topics like communication, problem-solving, and decision-making.
As they get older it’s really important to teach them the life skill of managing money and an income.
I really believe that young people that learn money management will have an advantage later on in life.
Allen is an 8th grade teacher in a Chicago suburb.
