At what age should children start learning about money?

Sep 5

By Vivian

Five, 13, 18…Based on what I have experienced, observed, and learned throughout my time on earth, I think children can start learning about money as early as 4-5 years old. We teach them how to talk, walk, play, interact with other children and adults, and explain the difference between yes and no and right and wrong. Why would it be any different with money? Teaching them about savings for a short-term goal (e.g toys) and long term goal (e.g. video game, cell phone, college) shows them how to save their money for something they want. At 5 years old, you can bring them to a financial institution to open up a savings account with money they get from a gift. You can have them put their allowance aka “income” and money they earn for extra chores in a piggy bank so they can visually see their money grow. Once it gets full, bring them to a financial institution to open a savings account to which they regularly make deposits to. For birthdays, holidays, and special events in their lives where they receive money, you can have a discussion about what they want to do with it. One half goes into savings and the other half to spend (or save) on something they want to purchase. They have choice which equals buy in that leads to habit. Repetition of this conversation then becomes a normal habit for them. As they begin working in their teenage years, they already have the habit of savings and you can have discussions about having a budget and living within their means.

Teaching children about money is like building a house.

Foundation: saving and decision making about money

Level 1: saving and spending

Level 2: monthly budget, living within your means

Level 3: decision making with small and large purchases (save the money to make the purchase, borrow the money or use credit) Level 4: using credit wisely and not becoming over indebted Level

5: financial goal setting (e.g. education, retirement, travel)

Oh how I wished I knew this when I was growing up and to have been able to do this when our kids were growing up! How fortunate I am now to share this with our adult children, grandchildren, the next generation to come and with all the individuals I cross paths with!