Money Minded Kids

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Can preschoolers learn about money matters? Are middle schoolers savvy savers? Do high schoolers actually stick to a budget? Yes, yes, and yes!

As a financial planner, I’ve seen firsthand what financial literacy can do for your child’s future.

As a parent, I urge you to start teaching kids about money as early as three years old.

Raising money minded kids is easy when you make a Reward Chart part of your family dynamics. It helps you introduce the concept of money from an early age. And, as your little one gets older, you can adapt your money lessons to build life skills that last a lifetime

Fun, customizable Reward Charts like these keep kids engaged, no matter how old they are. From toddlers to teens, this is how you can set up a system that promotes grit, audacity, and resourcefulness in children.

From Preschool to Kindergarten

If your child can count and sort, they’re able to grasp the concept of cash. By age 4, most preschoolers understand the idea of exchanging money for goods. After all, they see you paying for items at the store every time you run errands together.

In fact, it was our Target runs that got my child and me started with “the chart”. Prior to this, my preschooler was already familiar with the concept of rewards. Like many parents, we let her have a candy if she used the potty or she could choose a small prize if she stayed in her bed through the night.

Once she got a little older, running errands with mommy meant lengthy visits to the toy department begging for new playthings. Next thing I knew, I’d given in, and my budget was out the window. Not what I had in mind when I headed to the store for family essentials.

Until a friend introduced me to the concept of a Chore Chart – which I decided to rename the Reward Chart and later nicknamed “the chart.” Talk about a handy tool! Rather than creating a negative association with spending, a reward system empowers your child to earn money. They take on age-appropriate household responsibilities, and you pay them a fair wage.

If my kids get all their chores done, they get $5 per week. But the lesson doesn’t stop there.

When they hit the store with their hard-earned money, that’s when they learn the real value of a dollar. They read price tags, practice their math, and make choices. This allows them to save and tap into delayed gratification or get creative about how they spend their funds. Either way, it’s a win-win!

Elementary Through Middle School

Naturally, this big win got me excited about the possibilities of our chart system! I had to ask my friend more about how she used the chart with her older kids. You can imagine my excitement when I learned that the Chore Chart system only gets better as your kids grow up.

With the Reward Chart well-established, kids between the ages of 6 and 10 have a good handle on wants versus needs. But advertising is always there to make them want more. The answer to this? Tap into your child’s entrepreneurial spirit.

If they have their eye on a big-ticket item at the store, picking up some extra chores around the house could earn them more money. And if they’re open to that idea, you can also introduce them to the concept of using their money to earn more money. By investing their earnings in a lemonade stand, your child can multiply their savings.

Before you know it, your child will use their creativity to think of new ways to make extra money. Dog walking, bake sales, and can recycling are only a few ways for your child to start building their nest egg. Plus, they create a great family bonding experience and teach children valuable business skills.

But don’t worry, most kids don’t quit their “steady job” (AKA the Reward Chart) over their side business. Even at a young age, children understand the value of stable earnings. Adding another source of income is a great way to start conversations about cash flow, investments, and management.

High School and Beyond

Could the Reward Chart continue to work during those challenging teenage years? All sources point to yes! The key, according to experienced parents, is to increase your child’s weekly pay without giving into the temptation of adding an allowance. In other words, leave them wanting more.

Even young adults appreciate a financial plan. With little financial responsibilities and so many fun ways to splurge, the teenage years are the perfect time to double down on goal setting. But – as with all-things teen – don’t expect a smooth ride.

Chances are your child will blow through their money once or twice. They’ll give into the temptation of a cool new gadget or a trendy outfit – as we all have at some point. But experience is the best teacher and when your teen finds themselves cashless, they’ll learn their lesson.

Around the age of 13 is the perfect time to open your child’s first checking account with debit card. Shortly after that, they’ll be ready for their first job. And, once they have a good amount of savings, consider an investment account as well.

It’s important to use the teenage years to talk to your child about the power of compound interest. Set up a time for them to meet with your financial advisor and get them started on their path to financial freedom. Before you know it, your kid will be off to college and onto adulthood as a financially responsible young adult.

In my experience, starting young is the best way to build wealth. By giving your kids the gift of financial literacy, you can offer them an invaluable edge.

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