With two kids under 10 in my house, I’m constantly shocked by how much they grasp. At the same time, it also amazes me how much they still have to learn when it comes to money.
Yesterday, I told my kids I was going to the grocery store and asked if they wanted anything. My son replied, “$600,000.” We had a conversation about how much money $600,000 is, and he seemed surprised.
Kids don’t learn enough about money in school. It’s unfortunate, but it’s not a core part of the school curriculum. So, it’s up to us, as parents, to teach our kids about money.
But what should they know, and by when?
Money Lessons for Kids
There are countless things you can teach your kids about personal finance. Choosing the most important lessons can seem overwhelming. Fortunately, we’ve narrowed it down for you.
Here are 10 things to teach kids about money before they are 10.
1. The Difference Between Needs and Wants
As simple of a concept as it is, needs versus wants is foundational to understanding money. Plus, it’s something that we can all continue to learn and build on.
When kids are really young, they can learn about toys being wants and clothes being a need. As they get older, it’s important for them to then further distinguish. For example, some form of clothing is a need, but a designer brand is a want.
2. The “Why” to Save
When you teach kids why to save money, you are teaching them more than just about money. Specifically, you are teaching them long-term thinking and self-control.
Help your kids set goals for what they want to spend their money on.
3. How to Track Savings
Once you’ve established what they want to save for, help your kids track their savings. Create charts so that they can visualize how close they are to their goal.
Again, this skill extends beyond just money. Tracking progress towards goals is a huge part of growing in life.
4. The Value of Experiences Over Stuff
Happiness is more often found in experiences than in things. Encourage your kids to save for an activity they want to do.
Or, if they want to buy something, help steer them in the direction of something that helps them have experiences. Great examples of this are a snowboard, a game, or a baseball glove.
5. How to Earn Money
Kids need to learn that money doesn’t just appear. They need to understand the importance of the work you do to earn money. Plus, they also need to learn how to earn money for themselves.
Kids under age 10 can do chores to earn money or an allowance. Additionally, you can point out things they might do as they become older, such as babysitting or mowing lawns.
6. What Entrepreneurship Is
Even if you aren’t an entrepreneur, teach your kids that entrepreneurship is important.
Entrepreneurs solve problems, and they also are able to be more self-reliant. When someone knows that they can earn money for themselves without needing to work for someone else, it gives them increased confidence in the jobs they do.
7. Importance of donating money
Not everyone has the same opportunities you and your kids do. We focus on donating time and money to those we have less.
In recent years we have used November to focus on charitable giving by choosing a different charity to give money to every day.
8. Work Ethic
Praise kids for working hard instead of what they achieve. This will teach them that the value of work ethic (also known as the progress they are making) is more important than the outcome.
9. How to Count Money
Kids can learn to count money as early as pre-school. Get them involved when you pay for things and teach them to count coins and dollars.
10. Celebrate the Wins and Keep Going
When your child has reached a savings goal, celebrate. Or, when they’ve worked hard to earn their first few dollars, celebrate.
Then, teach them to enjoy the progress they’ve made and to keep going.
The Bottom Line
Helping your kids learn about money can start before their 10th birthday. Raising financially literate children can ensure they are set up for success later on in life. Make it a point to include personal finance lessons in your child’s life as often as possible!
What else do you think kids need to learn about money before they are 10?