Kids and Money: Teaching Elementary-Age Children

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It is vital that you get your kids started early when it comes to learning about money. The earlier you start, the more likely it is that they will grow up to make good financial decisions. You can teach children of almost any age about money. You can start with simpler concepts when they are toddlers, and then move to more advanced concepts as your children get older.

Elementary school is good time to build on some of the concepts you might have started with when your child was a toddler. Elementary school children are learning math concepts, and may even learn about money in school. You can build on this at home. Here are some ideas for helping your elementary-age child build better money habits.

Have Money Discussions at Home

Talk about needs and wants with your child. Show how in your home, you distinguish between needs and wants. You don’t need to lay heavy concepts on your child, but you can start by explaining that some things, like fruits and vegetables, are needs. We buy these items before we buy chips and candy, which are wants.

Let your child see you and your partner discussing what you will use your money for. My husband and I talk about saving up for a new laptop, or how we would like to use a windfall for investing, at dinner, while my son is around. While some investing concepts might be a bit beyond him, he can understand saving up for something. The idea is that he is used to us talking about making good decisions, and he knows that we have a plan for our money.

Show Your Child How to Shop Around for the Best Deal

My son was terribly upset when we wouldn’t let him buy a toy that he wanted at the store. He had saved up his money, and thought he should be able to spend it. However, once we got home, we showed him how to look for the best deal. We searched for the toy using the computer, and showed him that it cost $5 less online — and came with free shipping. We did some math with him and showed him that he could save money, and use that $5 toward something else.

Now, my son loves looking for bargains. He likes to look at prices at each store when we are shopping, and compare those prices to what’s online. Because he has been learning “more” and “less” at school, and because he has been working on subtraction, we were able to build on those basic math lessons to help him apply them to money.

Let Your Child Make Mistakes

Sometimes, you have to let your child make a mistake. It’s better that they learn that their money decisions have consequences now, than to have a bigger money mistake cause larger problems later. My son was sure he wanted some toys he had seen his friends play with. He insisted that he be allowed to buy them. He spent about $10 on these toys. Then, after two days, he was bored of them because he wasn’t interested in the TV show they were based on.

Instead, he wanted to buy a Star Wars Clone Wars toy. Unfortunately, after spending that $10 he didn’t have enough money. We had to tell him that he couldn’t raid his savings for the money (we were proud that he didn’t even consider raiding his church donation jar). Instead, we talked about thinking about what you are buying, and making decisions based on what’s important to you, and not getting something because your friends are.

It was a hard lesson, but this mistake has caused my son to think twice before he spends his money. And he has a stronger sense of responsibility for his own financial situation.

What tips do you have for teaching elementary school kids about money? Share your thoughts in the comments section!

{ 10 comments, please add your thoughts now! }

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10 Responses to “Kids and Money: Teaching Elementary-Age Children”

  1. Suzanne says:

    We have two boys age 9 and 6 and we’ve found that playing board games can be a great way to help with money discussions. The Game of Life was particularly good as it was brought home to them the difference a college degree can make to salaries.

    Also, for general math skills (vital for money skills) for the 4 – 6 year old set, I highly recommend Sum Swamp. My kids loved playing it and it was great for acquiring early addition and subtraction skills. Our First Grade Teacher loved it so we’ve passed on our set to her.

    Love that you taught your son to shop around. As a slight variation of this, I’ve taught my sons to check the reviews to make sure that the toy they want is actually a good one. We whip out the iPhone in the store to double check before we buy.


  2. Shirley says:

    “Talk about needs and wants with your child.”

    I’m glad to see this at the top of the list and I feel that it is the most important lesson you can teach a child about money spending.

    I have found that the decision between wants and needs becomes more clear to the child if you ask, “What will happen if you don’t get that item?” Their answer is oftentimes their decision maker.

  3. Nice piece.

    For my six-year old, she has a list with up to 3 future purchases on it. The purchase has to be on the list for at least a week before we’ll buy it. She can only have 3 items on the list. So if she see’s something new that she’d like, something has to come off the list.

    I think since we’ve started the list over a year ago, she’s only bought 1 thing (and it was, of course, with her own money that she’d saved)… interests change, impulse emotions fade, new toys come out, etc.

    Something else that helps our household is we don’t have TV (just Netflix, which we limit their viewing). So there’s not a constant barrage of commercials inciting discontent with current toys.

    • E Breacan says:

      I have to say, this was a great comment.

      I never really thought about TV commercials inciting discontent, but it’s an excellent point.

      I too have been working on teaching my daughter the value of money and the benefits of saving, but have found those lessons easy in comparison to teaching her to be happy with what you have.

      Striving for better is one thing, but being content with what you have is important.

      • Shirley says:

        I ran across this exact situation with one child. It pretty much ended when he claimed that the game he had was ‘no good’ because there was a new version out.

        I told him that if he didn’t want that one anymore he could put it in the goodwill bag that was going out that day. He did, undoubtedly thinking it would be replaced with the new version. It wasn’t, and he learned a valuable lesson about appreciating what you have.

    • skylog says:

      matthew, that is outstanding! i am forwarding this idea to several of my friends with a quickness.

  4. Amy Saves says:

    My daughter earns an allowance for helping out with chores. Once a month she gets paid and she gets to use her money for stuff she wants, such as nail polish or other girly things that I think are frivolous. She learns about money and saving up for things she wants instead of just getting stuff handed to her.

    • Shirley says:

      The purchases that a child saves for and makes on their own are much more meaningful and better taken care of than that which comes too easily.

    • ann says:

      I was wondering if your daughter earns money for every chore she does? My son is 5 years old and i’ve been thinking of introducing some duties for him, also paid ones, but I’m afraid it spoils him right away. Shouldn’t he be helping out without being paid for? But maybe, after he does his let’s say 2 duties, he can be paid for doing something extra? (and only if he does what he has to do). What do you think?

  5. Strebkr says:

    All very good points. I can’t wait to start on my 2 boys (2 year & 4 month old)

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