Teaching Kids about Money: Excellent Fun Budgeting Activities

teaching kids about money

The best way to help your child to learn the value of money and how to survive in the world where our lives depend directly on green banknotes is to make her get used to different ways how we can earn, consume, and save money. You should be aware that your kid probably thinks that money is free and doesn’t know how you get it. That is a reason why you should give your child a healthy start in life when it comes to money.

From the moment your child begins to learn mathematics at school, she is entirely capable of understanding the value of cash. It is up to you to give her a healthy perspective on how to spend and save it. I am going to give you some tips on how to teach your kid about money and to make the process of learning much more manageable and relaxed.

Money and Kids

teach your about money

Believe me; the money is a boring topic for kids. It is adult stuff and entirely private issue which children would prefer to avoid. On the other hand, many parents are also not prepared for this theme because they are very often insecure about their financial knowledge.

According to various surveys, many Americans are not entirely confident in their knowledge of some basics terms such as interest rates or inflation. Many people start to work unprepared for making money decisions and balancing their household budget. It seems that someone should organize budgeting activities for adults too.

The fact is that until recently, there was no money education in most schools. Nowadays only high school students in four states (Virginia, Utah, Tennessee, and Missouri), has some basic education during a personal-finance course.

Since 2008, Americans have had a problem with millions of defaulted loans which have led to the recession. The country still needs to recover from it. You should do something about it! You can teach your kid not to repeat your mistakes. Help your child to understand a concept of planning, saving, and comparison shopping. The key is to make this learning fun, to start on time, and to make sure that your talks are kid-friendly.

How to Teach Kids about Money

No child in the world understands a concept of money or has any budgeting skills necessary for surviving. You as a parent need to teach your little one how to appreciate money, how to handle with it, and, the most important, to find a way not to let money control her and her actions. That is implied by the term ‘adequately educating children about money’.

Every child matures at a different rate, but you can start with a general guideline, and continue teaching your kid about finances at speed and in a way that suits her best.

Teaching Preschoolers about Money

Age 3

Teaching three years-old-child about money should start with the tough thing for every kid – How to practice waiting. It is a perfect period when you should begin to teach your child about patience. She needs to understand what to do when she can’t get what she wants immediately.

You need to find a way to explain to your child why is something she wants worth of waiting. After that, you should explain her concept of saving money and the satisfaction of buying something after adequate planning. The crucial thing is to make your child understand why every entry to the shop doesn’t mean that you have to buy something for her.

Fun Budgeting Activity – Offer chocolate candy or a cookie to your toddler and explain to her that she can take it right now or can wait for a while and get two chocolate candies or cookies. Children are different and sometimes can surprise their parents. Anyway, let her possibility of choice. You can try to point out the advantage of waiting and encourage her to be patient.

How to Teach Elementary Students about Money

 Teach Elementary Students about Money

Age 4

Teach your child how to make a connection between her math skills and money and show her how she can count it.

Fun Budgeting Activity – Collect metal coins during a few weeks and put them in a jar. When you fill the jar, organize a ‘countdown hour’ for your toddler during the weekend. You should begin by counting all the coins. Your kid needs to determine how many coins are there in the jar.

The next week, introduce your kid with a particular coin. ‘We call it a quarter’. The task is to find all quarters in the jar and count how many of them are there. Continue with the new coin every week until she learns to recognize all of them. To make this fun money game more exciting, continue with collecting. More coins, more fun. When your child masters this assignment, go shopping. She deserves to get a prize. That is the purpose of saving, right?

Age 5

It is a period when children want everything they peers have. You should stop that ‘begging’ for stuff before it even begins.

Fun Budgeting Activity – Pick out three jars. If you are talented, you can paint them with different colors, do decoupage, or simply decorate them with strips, labels or stickers of different colors. You should label each jar with marks – ‘Spending’, ‘Saving’, and ‘Sharing’.

When your kid gets some money, encourage her to divide it equally among the three jars. She can use money from the ‘Spending’ jar from time to time to buy candy or a small toy, for example. Money from the ‘Saving’ jar is for expensive things she wants to have. The good idea is to let her pick out only one thing of two ones she wants. In the end, give your child a topic for thought. She should donate money or determine a person in needs by her choice and give her money from the ‘Sharing’ jar.

Age 6

When your child is six years old, you can begin to give extra tasks to her. It is a perfect age for starting with an allowance, according to experts’ opinion.

Fun Budgeting Activity – Give your kid an allowance once a week. How much money you will give her depends on your will and family situation, but you should consider giving a child a dollar per year of age. That means that you can provide a six-year-old child with $6 every week and she can save that money, spend all of it for one thing, or make an arrangement to have pocket money every day.

Age 7

It is a weird period when everyone asks children what they wanted to be when they grew up. It seems that seven-age-kids are mature enough to talk about work. During that talk, you can mention that all of us need to earn money, but people also need to be wise and enjoy their job.

Fun Budgeting Activity – Encourage your child to draw a picture with all details about her dream job. At the same time, explain to her what you do at your work and why you pick out that particular job. You should teach your kid that earning money is necessary, but it is not the same thing whether you enjoy your work or hate the job you have been doing.

Age 8

It is a time when your child should discover how much money you give for various household things. You should explain to the child a concept of bills. She is old enough to understand that you can’t spend all earned money on your and her pleasure.

Fun Budgeting Activity – Let your kid see what kind of bills you need to pay every single month. Show her a bill for mortgage or rent and taxes you have to pay. These numbers will be too big for her to understand, but it is an excellent beginning. The point is that she realizes that her mom needs to pay bills, but that it is not a big problem while she adequately arranges the money she has earned.

Age 9

The time has come! Your child is old enough for her own saving account. If you have done the job well, your child has already understood the concept of saving money. It seems that this is a right moment to exchange the jar with a real bank account.

Fun Budgeting Activity – Go to the bank with your child and open custodial savings account for her. Put some amount of money ($25 to $35) on the account and tell the child that she can add deposits whenever she wants. Explain to her that she should save that money for something special such as a new bike. You can even give her an offer. For every dollar she adds to the account, you can add a dollar as your contribution.

Age 10

Explain to your child the meaning and purpose of credit cards. It is wise giving a child the right information about various types of cards and accounts we use.

Fun Budgeting Activity – Show the child all cards you have including debit and credit ones and explain to her why they are different. She should know when you use cards where you have your own money and when you need credit cards to borrow the money. Explain the importance of paying the debt back on time. Let her swipe your card in the grocery store and make the lesson fun.

Age 11

The importance of budgeting games for kids rises from this age. It is a period when your child is subject to external influence, and she is ready to buy everything she sees on commercials. Your task is to bring her wishes to a reasonable level and to explain to her the purpose of advertising the product.

Fun Budgeting Activity – Buy some magazines and show your child how many different ads are there for various brands. Explain to her the ways of manipulation with consumers’ emotions to get people to buy more. You can spend some time doing the same thing during TV advertisements and teach your kid to refuse to fall into the trap of the ‘cool’ brand-name.

Age 12

Go shopping with your child and take the opportunity to show her how to buy wisely. You should prepare her for making cleaver purchasing decisions. Also, teach her how to identify quality stuff and avoid wasting money on trash.

Fun Budgeting Activity – When you go shopping together, show your child quality pieces of clothes and cheaply-made variants. Teach her to easily spot the difference between various qualities of fabrics and ways of cutting. Maybe you should buy two T-shirts at once and practically show her the difference after you put both shirts in the washing machine several times. It is a valuable lesson which will make your child understand that buying cheap doesn’t always mean saving.

Age 13

Maybe it is the time for your child to understand what the stock market is. Surprisingly, even many adults don’t realize how the stock market works. Try to make this hard topic accessible to your kid.

Fun Budgeting Activity: Explain to your child how you invest your money in the stock market and how it will help you to get extra money in the long term. She should learn about risks related to the short-term investments and advantages of the long-term ones. It is probably the most valuable information about money you can give to your child.

How to Teach Middle Schoolers about Money

Teach Middle Schoolers about money

Age 14

Parents need to find an adequate way how to teach teenagers about money because there is a high likelihood that your child thinks she knows better than you. Also, be prepared that your beloved child will rather listen to someone else than you in this age. It is a period when your kid can start working.

Money management activities: Your teenager probably needs more money than you want (or can) to give her. Well, encourage her to make some money by her own by mowing neighbors’ lawns, delivering newspapers, or babysitting. She will probably enjoy the freedom her own money can give. She can spend her money at her own will. Let her know that she should work in order to buy things she wants because making cash will bring her a lot more options.

Age 15

If your child is responsible by nature, it is a right time to open her checking account. From now she will have both options to save her money and to write checks. This account should be only hers, and you shouldn’t add money to it.

Money management activities: You need to talk with a bank official because you need to be a cosigner of this account. Explain to him that you want your child to be financially independent as early as possible. This account will exist for your kid’s money from her after-school job or some savings, and she will be responsible for it. If she overspends a limit, she will suffer all consequences.

Age 16

Teenagers are pretty busy at school and with extracurricular activities. It means that they need to find balance in their lives. This period is essential for them to pay attention to how they manage their money because they are usually entirely absent-minded and most often in love.

Money management activities – If you notice that your teenager is overworked, you should organize one afternoon break for her. Bake some cookies, make a smoothie or hot chocolate, and try to figure out if there is a solution for too many duties your kid has got. Explain to your teen the difference between hard work and extreme exhaustion by an unrealistic schedule of obligations. Having money is excellent, but entirely worthless if your life is not adequately balanced.

Age 17

Your child is already old enough that she can understand what credit reports are. If she thinks about going to college, it is the moment when you should talk about credit.

Money management activities – If your child has her own credit report, you should check it and explain to her the importance of high credit score. Having the good one is possible only if she fully pays off all her bills on time. Without a good credit score, she won’t be able to get a loan for her own house for example.

Age 18

Congratulation! Your child is already a teen who heads off to college. Even though it is not a case and your teen wants to start working, you should explain to her how loans work regardless of whether it is a student or general credit.

Money management activities – Talk about a student loan. She needs to know that taking the one means that she will need to pay interest on that loan for years. Offer your help with paying if you wish or can. Make a plan for saving money during years in college and repaying a loan afterward. It is a serious issue, and both of you should be careful about the subject.

Nowadays, one of the most important lessons your child should learn is this one about financial skills. Even a three-year-old child can understand the difference between spending and saving money. According to various studies, your kid will form the money habits by age seven. The sooner you begin to teach your child about money, the better off she will be.


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