It’s never too early to start talking to your kids about money. But how do you explain to your 4-year-old that Paw Patrol figurines don’t just fall from the sky? It’s complicated. It’s also essential, which is why we checked in with Beth Kobliner, author of Make Your Kid a Money Genius (Even If You’re Not), for some great tips on how to help your kids be financially savvy at every age. After all, if you’re not the one teaching them how to manage their cash, who will?
How to Teach the Toddler and Preschool Set About Money
1. Teach Them to Wait
Self-control is the name of the game. Anyone who has a toddler knows that their instinct is to get what they want as soon as they want it. But teaching a kid to wait doesn’t just make them a considerate playground playmate; it plants a seed that delayed gratification has its perks. Say you’re on a routine trip to Target and your son demands the jumbo Lego set. Instead of trying to rationalize that a two-inch Batman is simply not worth $50, explain that a toy like this is special and it’s better to wait for a celebration—like a birthday—before bringing it home.
2. Invest in a Clear Piggy Bank
A ceramic keepsake is great and all, but unless they have a visual of money going in—and coming out—it’s hard for them to recognize the actual purpose of setting aside their coins. A clear piggy bank (like this one from the Container Store) allows them to see their cash grow and also gives you the opportunity to call attention to it. (On Monday, they had four quarters, but on Friday, they have a dollar bill and two dimes, for example.)
3. Pick Up a Cash Register and Play ‘Store’
At the age of two and three, kids’ brains are a sponge, which is why it’s the perfect time to help them learn how to identify not the value, but the names of the coins. (A nickel is a different shape than a dime and a quarter, after all.) If you already own a cash register toy, awesome. If not, this one is a great option. Next, set up a store in the playroom and encourage them to “shop” for things and ring up their purchases just like mommy does at the grocery store. This will help them learn the basics of commerce and the concept of exchanging money for goods. One note for this age group: They’re still in the phase where they put things in their mouth, so keep an eye on those coins.
How to Teach the Elementary and Middle School Set About Money
4. Explain ‘Opportunity Cost’
Yep, your budding second grader is totally able to understand that you often have to give up one thing to get another. For instance, if you give Judy $2 for after-school snacks, but she wants to buy a mermaid blanket, explain to her that she can bring a granola bar from home every day until she’s saved enough to purchase it.
5. Banish the Brand-Name Zombie
To be fair, it’s not easy to ignore brands at this age. (Remember your whole Body Shop obsession?) So, instead of trying to convince your middle schooler that no one will notice the generic version of whatever it is they’re lusting after, reinforce the difference between wants and needs. A Brandy Melville top is a want. Something to cover her midriff is a need.
6. Give Them an Allowance
There are a variety of ways to set this up for them—and you’ll need to decide up front if you want it to be chore-related or not—but the goal of this is to help them recognize more about that opportunity cost. For example, they can spend their $1 a week allotment on candy…or they can save up for something with a greater value/meaning in their lives.
7. Teach Them the Value of Giving Back
This goes hand-in-hand with their allowance. A lot of parents actually require their kids to set aside part of their allowance to go to a charity of their choice. This way, they learn the importance of helping someone in need and the impact that giving has on both the recipient and the giver.
How to Teach Teenagers About Money
8. Introduce the Idea of Saving Up for ‘Extras’
Even if you can easily afford a coveted teen “must,” it’s not only OK to say no, it might actually be good for him. Maybe your 15-year-old wants headphones with a price tag that spurs serious eye rolling on your part. Encourage him to save for the headphones, and he’ll either value them more or realize that babysitting for 15 hours just to buy them really isn’t worth it.
9. Give Them the Responsibility of a Bank (and Savings) Account
Cue the piggy bank graduation: Now’s the time to actually take your big guy into a bank and help him open up a checking and savings account in his own name. This takes money management to the next level, which is why it’s also important to teach the basics. For one thing, don’t just open the account for him—bring him in to meet with the bank teller himself. Then, show him how to log in online and keep tabs on his balance and withdrawals and deposits. (Bonus points if you teach him how to balance a checkbook, too—no longer essential, but kind of a life skill, right?)
10. Try to Help Them Understand Contentment
FOMO is real, especially when your teen is on social media 24/7 getting served ads of things they “have to have” and also seeing their friends put material things on display. That’s what makes contentment one of the hardest values to teach. The best way to approach it is with conversations about their feelings: “Yes, we drive an older car, but this allows us to save for X vacation next year” or “I know you wish we could buy you that leather jacket, but you already have this jacket that you love—we can revisit when you need a new coat.” Also, it’s worth paying attention to how you talk about the comparison trap around your teen. (Hey, we all have those feelings sometimes.)
11. Encourage Them to Get a Summer Job
College is coming. Even if you’re in a position to cover tuition, requiring your kids to offset the price of incidentals like books—or an apartment off-campus—is worthwhile. It also means they have some skin in the game (i.e., they might be less likely to slack off if they had to contribute to the astronomical cost).