[custom_frame_left][/custom_frame_left]Recently, my five year old son and I were at the store and he spotted a toy that he’d been asking to buy for quite some time. When he asked if we could buy it, I told him no, that I wasn’t going to spend the extra money. He said, “Well Mommy, if you don’t have any money, just use your debit card!” I realized then that perhaps it was time to explain to him about saving money and how the banking system works.
I attempted to explain that having a debit card didn’t mean we had unlimited spending power. He then wanted to know how mommy and daddy’s boss got our money onto our debit card, what the bank did with our money, and why we had to save some of our money. I began to realize that money, and the making, spending, and saving of it, are all rather abstract ideas and not easily understood by a small child. I wasn’t sure how best to explain it to him and also teach him the importance of managing his money.
When to Start
Most experts agree that trying to talk to children about money management too early is futile. Most young children (usually age four and younger) can’t grasp the concept, and it would likely just confuse them. It’s best to start the conversation when your child begins asking questions. Do your best to answer their questions in simple terms, but it’s not necessary to provide too many details.
There are a variety of ways to teach your children about money. You can lead not only by your own example, but also by instituting chores and allowances, assisting them in opening savings and checking accounts, and eventually helping them to understand debit and credit cards.
What We’ll Cover
In this day and age of materialism, our kids are inundated with television ads designed to convince them they need this toy or that gadget. Our kids have computers and cell phones and electronic games of all types, and it’s more important than ever to teach them the virtue of managing money responsibly.
In this three-part series, we’re going to explain in more detail the best ways to explain money management to children of all ages. We’ll provide suggestions for four age brackets (5-9, 10-13, 14-18, and 19-22).We’ll also provide some tips on making the lessons both fun and educational.
Coming up Next … Teaching Kids About Money, Part II: Age 5-13