When your child grows up, they constantly witness money being transferred when making purchases but rarely see money being earned or saved. This distorting view of how money works can lead them towards financially irresponsible decisions. Learning to save money starts early and you can do a few easy exercises to help your child develop a healthy relationship with money.
In our last article, we shared tips to teach your preschooler. This month, we are focusing on how to teach elementary-aged kids to handle their money.
Counting Money Practice
Young children have an understanding of money but not necessarily how many bills it takes to accumulate. Practice counting money with your children and naming all the different bills and coins. While your child may understand $20 is more than $3, they likely do not understand just how much more.Counting these amounts in quarters, for instance, can provide a concrete understanding of money. You can also try coin collecting as a way to teach your child the value of each piece of money. Mid-Minnesota has coin collectors to help with saving, stop into any branch to take one home to begin these lessons.
Break Down Savings Into Categories
Hopefully, as your child acquires money from birthday or holiday gifts (and maybe an allowance), they already know to save it in their piggy bank. When your child is school age, you should take their savings to the next level by designating categories. Childdevelopmentinfo.com recommends.
Establish a saving system with your child with some short-term and long-term savings. eg: $2 set aside for charitable contributions/church, $2 investing (stocks, bonds, mutual funds), $2 savings for a short-term goal like a toy, $2 savings for a long-term goal like a swimming pool or college fund.
Understanding the value of money, counting money, saving money for specific categories, and planning your money for the future are all skills that will result from enacting these two tips. Your elementary aged child is just starting their financial journey; help ensure they get off to a great start!
Next month, we will focus on teaching older kids to manage their growing savings. Stay tuned!