By: Patricia Seaman, senior director, Smartaboutmoney.org
Children are constantly exposed to material goods and financial transactions, and without a proper explanation of the basics, they can grow up without a clear understanding of the value of money and how to use it.
The following are age-specific tips for teaching your child about spending, saving, and money management in practical ways.
Ages 2 to 4
, helping him or her sort the coins by like kind and explaining the concept of equivalency (e.g., five pennies equal a nickel, two nickels equal a dime).
, instead of a piggy bank, so he or she can see money accumulate and know it is still there.
, using change from his or her jar or your own wallet. Play the part of a customer while your child is the cashier; then, switch roles.
Ages 5 to 7
As your child approaches school age, let him or her handle money on a regular basis so he or she can become comfortable with cash. Depending on your circumstances, you may start providing a small allowance. If you choose to give an allowance, be consistent and set some ground rules.
You may consider having it correspond with your child's age.
Do you expect your child to complete a few small weekly chores in exchange for the allowance, or will those household duties be kept separate?
for what your child will need (or is allowed) to pay for from that allowance such as snacks, school lunch, outings, or video games.
, and pay the allowance on the same day each week.
. If your child chooses to spend the entire allowance on the day he or she receives it, point out the mistake without bailing him or her out.
not as a method of punishment or reward.
Your child surely has witnessed you withdrawing cash at the ATM or using credit cards to purchase everything from gas to groceries. Help your child make the connection that these cards represent money.
· Take your child to the bank when you deposit money in your account.
· Review credit card and bank statements with your child.
· Let your child count the money that comes out of the ATM and review the receipt.
Ages 8 to 10
As your child gets older, he or she undoubtedly will become interested in where money comes from and where it goes.
, and discuss how your child might generate his or her own.
such as housing, food, and transportation, and explain how much they cost.
Ages 11 to 13
Preteens often are pressured by their peers to keep up with the latest and greatest. Use this opportunity to be a strong role model and demonstrate for your child how to make smart spending decisions.
of long-range savings and investing.
High school is a great time for your child to put into practice what you have taught him or her over the years.
to open a checking and savings account in his or her name. Consider adding a pre-paid or bank-secured credit card to help your child establish a credit history and good credit practices while he or she is still under your roof.
, so he or she can start managing his or her own income and saving for such as a car or his or her college education.
by seeking out classes, field trips, and online resources.
Before your teen goes to college or moves out on his or her own:
- Review all the potential living, tuition, and education costs.
- Set your respective financial responsibilities beforehand.
- Go with your child to set up financial accounts in his or her new city.
· If your adult child has returned to the nest, have a serious conversation and set strict guidelines for any financial support you provide.
- See more at: http://www.smartaboutmoney.
org/Your-Money/Life- Transitions/Talk-to-Your-Kids- About-Finances#sthash. HFiUAAiF.dpuf