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An Age-by-Age Guide to Teaching Kids About Money

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You can easily teach your kids about money by turning your day-to-day activities into learning experiences with the help of our age-to-age guide to teaching kids about money.

Trips to the grocery store or the ATM machine, for instance, can be a perfect opportunity to discuss your values and how you use money. When children are very young, you can work money lessons into your child's imaginary play, like playing pretend store or restaurant.

An Age-by-Age Guide to Teaching Kids About Money

Here are a few simple, age-appropriate tips for teaching kids about money and how to introduce finances to your children.

An Age-by-Age Guide to Teaching Kids About Money

Ages 2 and 3

A 2- or 3-year-old, when given a choice between a penny, dime, and nickel will almost always choose the nickel because it’s the largest coin. But while young children may not fully understand the value of money, they can start to learn the names of coins and their values. One way to do this is with the coin identification game. You and your child can trace around the outside of different size coins and color in the shapes. Then ask your child to match the coin to the drawing while discussing each one by name and value.

Ages 4 and 5

Before going grocery shopping, ask your preschooler to help you clip coupons for the items you intend to buy. Then, at the store, let them find the products that match the coupons. This is an easy and fun way to teach your child about saving money.

Ages 6 to 8

When your child starts receiving an allowance, it’s time to make a special trip to the bank to open their first savings account. Encourage your child to make regular deposits from their allowance and cash gifts they receive. As the balance starts to grow, you can start to explain how interest works and how the bank pays their customers back for saving their money. Most banks have children's accounts that offer no-fee and no-minimum-balance.

Ages 9 to 12

Now is the time to start teaching your child to comparison shop. One way to do this is to read price labels with your child when you’re grocery shopping. Look at the quantity and price, then compare the name brand to the store brand. Talk about the differences between the two and decide together if the brand name is worth the extra cost.

Ages 13 to 15

Teens are ready to start learning about the stock market. You can make pretend investments in companies your child is familiar with, like Disney or Nabisco. Make it a family activity and have each member pick a stock to follow. Then read the paper or watch the financial news together, and talk about how the stock values of everyone's choices vary.

Ages 16 and up

Pre-paid debit cards are simple tools that parents can use to teach lessons in financial responsibility. Some cards, like the American Express Bluebird, allows you to easily transfer money to it without paying a fee, deposit checks through mobile deposit, and even set money aside for savings or emergency use only. Teenagers can use these cards to pay for things without using cash or credit cards. Parents can load the cards with a set amount of money and then let their teens budget their allowance. Parents can also track their child’s spending by viewing the account summaries online.

Starting your child young and teaching them valuable financial lessons throughout their life will make your child better able to make financial decisions on their own when the time comes. Share your tips on teaching kids about money in the comments below,