As your kids enter elementary school, they will begin learning valuable skills that will help them build financial skills to apply in the future. They will be learning to add and subtract and learn to identify, count, and make change with money. In addition, they begin to develop better logical thinking skills and can understand cause and effect.
Parents can begin teaching basic money concepts such as earning money, spending money, paying for bills and purchases, etc. Many of these lessons can be taught in everyday situations at home. Begin by making sure they understand that you must work to earn money. Talk about what they want to be when they grow up and give them details about your job and why it’s so important.
Next, talk to your child about how they can earn money too, by doing chores, getting good grades, or from money they receive for birthdays or other gifts. Talk to them about how they can use that money to buy the things they want, which may require them to save some or all of it. When your child begins saving money, have them choose a large purchase they want to make – one they will have to save up for. Look up the price of the item and determine how much money your child will have to save each month in order to buy it.
One of the best ways to help school-age children understand money and budgeting is to let them help with shopping. Let them sit with you while you make your shopping list and talk about your food budget. While at the store, tell them why you choose certain brands (for example, do generic brands help you save?) and have them add up the total amount spent. Give them a small amount of money ($2-$5) to spend at the store for family purchases, so they can see how far their money goes.