5 Money Concepts for Young Children

GUEST BLOGGER: KATHY RIGGS, USU EXTENSION PROFESSOR

True story: Three siblings ages 9, 6, and 4 offered to do some yard work for a neighbor (It might have been me!). At the end of the project, the neighbor decided to reward the two older workers 50 cents each and the 4-year-old 35 cents based on the perceived amount of work done. When the 4-year-old was given a quarter and a dime, he handed the dime back to the neighbor saying, “I don’t want this, I want another quarter.” Evidently, this youngest sibling knew he was being short-changed!
So, at what age should parents begin teaching their children the value of money - earned or gifted? Below are five things children should know about money by the time they reach middle school. 

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Concepts for age 3-5 years

1. You need money to buy things: Identify coins and their value; Discuss how you may value something that is free, such as playing with a friend; Identify items that cost money, such as ice cream, gas for the car, or clothes.
2. There’s a difference between things you want and things you need: When you are out shopping, point out essentials such as food and clothing, and ask your child to describe items that he may want but are optional; Talk about how your family decides what to buy and what to pass up. Which is more important, buying cookies or fresh fruit? Soda or milk? Draw a circle and divide it into sections to show how money earned is a finite amount and must cover expenses.

Concepts for age 6-10

1. It’s good to shop around and compare prices before you buy: With your child, compare prices for a particular toy at various online or brick-and-mortar stores. Use coupons and discount cards and show your child how much you are saving.
2. It can be costly and dangerous to share information online: Know the websites your child visits; Know how to use parental control software to block inappropriate sites; Whether playing a game or shopping for toys, make it a rule that your child never gives out any personal information, like birth date, address, phone number, etc.; Make it a policy that nothing can be purchased online without permission.
3. Putting money in a savings account will protect it and pay you interest: Discuss with your child how money in a savings account is protected by federal insurance so if the bank goes out of business, you will still get your money back; take your child to a bank or credit union to open an account in their name.

 
Teaching your children key concepts about earning, saving and spending money is a smart move to save your child from developing poor habits to be carried into adulthood.
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Kathy Riggs is an Extension Professor with expertise in Home Food Preservation/Storage and 4-H Afterschool programming. I also dabble in several other areas including Financial Management! In my time outside of work, I participate in regular therapy sessions puttering in my yard and garden. I also love to hang out with family and spend time in the kitchen.