A Guide To Money Management Tips For Kids By Age

TOP MONEY TIPS FOR PRESCHOOLERS: Age 3 - 5

Start them young! Little eyes are watching you all the time. Your child will notice if you do a lot of online shopping and bags keep getting delivered or parents argue about money problems. So make sure to set a good example! Explain what money is, and show them how it works, preferably with cash.

Many parents will feel uncomfortable discussing money and finances with their kids, but it's an essential life skill, and the younger you start, the easier it will be along the way. A study by the University of Cambridge found that money habits in children are formed by the time they're 7 years old.

Here are some money management tips for kids ages 3 - 5:

• Age 3 – Patience: Learning and appreciating patience at a young age is of paramount importance. Learning they can't always get what they want and delayed gratification will have everyone happy in the long run.
• Age 4 – Adding: By now your little one should be able to count a little. If they can add 1 plus 1 and get 2, they can add 1 dollar and 1 dollar to get 2 dollars. They will soon start to learn that money and counting are interlinked. Get them a clear jar to start saving, check out our article on Teaching Kids Money Management with Money Jars.
• Age 5 – No: Learning to say no is an important lesson for all of us to learn. Kids need to realize they can't have everything, especially when they get to school when peer pressure starts.

TOP MONEY TIPS FOR ELEMENTARY STUDENTS & MIDDLESCHOOLERS: Age 6 - 11

When your children reach the age of around 5 - 6, they will start to comprehend the value of goods and set prices. Now’s the time to explain how much different toys cost and how people earn money.

Between the ages 6 - 11, there is much to teach in financial literacy, from allowance to charity to saving. Explain what jobs you have and how that allows you to take care of the family and buy what everyone needs. Connect yourself to the toys on the shelf and family outings. We have listed our top tips divided by age below:

• Age 6 – Allowance: Now is an excellent time to give your kids an allowance. They will start to learn that they will need to save for it if they want something.
• Age 7 – Career: Kids will start to be asked what they want to be when they grow up. Now is a good time to start talking about careers, money, saving, etc. Make this a positive experience and that going out to work every day is a good thing.
• Age 8 – Bills: Kids need to know how much things cost at home. Running a house, paying the gas and electric, school fees, etc. Sit them down and go through the credit card bill so they can see how much things really cost.
• Age 9 – Saving: Open a savings account to let your kids put their birthday and Christmas money there. Take them into the bank to do this and make them feel part of the process. They will feel very grown-up!
• Age 10 – Credit: Now is a great time to teach them about credit cards, and money isn’t actually free, it’s on loan. Let them see the monthly bill, minimum payments, how much you have to pay if you don’t pay the full amount, and what happens if you don’t pay at all.
• Age 11 – Advertising: Take the time to talk about advertising and sales. Kids need to learn all brands advertise and spend a lot of money doing so. Just because something looks nice in a glossy magazine doesn’t mean they have to have it.

TOP MONEY TIPS FOR TEENAGERS: Age 12 - 18

At this stage in their life, they are ready to have their first taste of financial independence, whether getting their first job, opening up a bank account, or learning about building credit. Check out our top financial literacy tips for teens aged 12 - 18:

• Age 12 – Purchasing: A little independence with money is a good thing. Kids need to appreciate the difference between cheap purchases and quality items which cost a little more. They need to know when and how to do this.
• Age 13 – Stocks: Some kids might take an interest in the stock market and how it works. At the dinner table, talk about the jargon, acronyms, and how it all works.
• Age 14 – Work: Time to get a job? Even if it's being paid for additional chores, babysitting, or selling seasonal crafts, kids really start to appreciate the value of money. As they get more independent and spend more time away from home, they will want additional income.
• Age 15 – Account: This is a good age to open a checking account. They can put savings and job money in there. Getting the monthly bank statement will help them see how much the account grows each month. This should be something that they take full responsibility for, so don't add any money into it.
• Age 16 – Balance: As they start to get busier with school, after-school activities, jobs, and everything else that consumes teenagers today, it's likely they will get a little stressed. Make sure that managing their finances isn't one of the things that slip.
• Age 17 – Score: As they prepare for university, often abroad, they need to understand what a credit score is and how it affects their buying habits. They need to understand how this will affect them in the long term. Make sure you sit down with your kid and go through this.
• Age 18 – Loans: Not everyone can rely on parents to fund them through university, so they need to take out a loan. Make sure they understand how a student loan works and how they have to repay it.