Like many of my Gen X peers, my childhood education in money matters was sorely lacking.
While I distinctly remember my dad balancing the checkbook each week (and inevitably becoming frustrated when things didn’t add up), money was rarely, if ever, discussed in my presence. I knew taxes were filed every year and that the credit card was used when the bank account had run dry, but that was the extent of my money management education at home.
Now that I’m the mother of five children, I’m determined to do better. Money is not a taboo topic in my house, and we regularly talk about income, expenses and the dangers of debt. In addition, I have served as a Junior Achievement volunteer in my kids’ school for the last six years to help bring financial lessons into the classroom.
If you’re struggling with what your kids should know and when, here are some guidelines based upon my experience both as a parent and with Junior Achievement.
Children, at every age, are like little sponges, soaking up everything they see. For that reason, how you act around your kids will be infinitely more important than what you say to them.
At the youngest ages, most kids aren’t going to be able to grasp the finer points of money, but they are watching you. Take your preschooler to the bank with you and explain that this is where you keep your money. At the store, talk about how one item is cheaper than another and stress that you have to pay money for anything you want to take from the store.
When your 5-year-old asks for a toy you weren’t planning to buy, tell him or her it’s not in the budget. Be clear that this doesn’t necessarily mean you don’t have the money for the toy, but rather that you are choosing to not spend your money on it right now.
These conversations don’t have to be heavy-handed or formal. My guess is you probably have a running dialogue with your little ones every day already (“Look at the cool car over there!”). Just work money matters into some of those comments. Much of this might go over their heads, but at this age, your goal is to plant seeds and simply familiarize your kids with basic financial concepts.
Once kids hit school age, you can build upon those early lessons with more concrete information. Some kids may grasp financial concepts more easily than others, but here’s how Junior Achievement breaks down their lessons and what they think is age-appropriate for each grade.
- Kindergarten. At this age, students are ready to be introduced to coins (if they haven’t already) and understand there are different ways for people to get what they need or want. They may earn money for purchases, barter for goods or work with others.
- First grade. By first grade, kids should understand the difference between needs and wants. They should understand that family members may work in various jobs to earn the money needed to pay for items.
- Second grade. The second-grade Junior Achievement curriculum focuses on communities. Students at this age can understand that communities are made up of various businesses. The idea of government workers and taxation is also introduced at this age.
- Third grade. Third-graders build on the idea of community and learn about cities. In addition to planning and zoning, kids are taught how to write checks, make deposits and balance their checkbook register.
- Fourth grade. Within the Junior Achievement program, this is when entrepreneurship is introduced. Students are taught how businesses must balance their expenses with income and how regional differences may play into business decisions.
- Fifth grade. By the time students get ready to leave elementary school, it’s time to discuss more advanced concepts, such as global competition, that can affect the nation. At this point, an introduction to advertising and a discussion of careers is also in order.
As with early childhood, you don’t need to have formal lessons on these subjects. You simply need to be aware of what your child is capable of understanding and then bring those subjects up in casual conversation.
For example, let your kindergartener help you sort the change jar, point out the new construction and businesses in your community to your third-grader, and talk to your fifth-grader about the commercials on TV and how they are intended to make you want to buy.