When you're teaching kids about money, it's always interesting–and at times amusing–to see the concepts take hold in their minds. While children need time and patient teaching in order to absorb money ideas, most childhood learning experts agree it's never too early to start. Sometimes it's just a matter of gauging the age-appropriateness of a topic and then explaining it in terms they understand. In that sense, one approach to teaching kids about money is to let your children's own curiosity guide you. When they have questions about money, use those as opportunities to have discussions about that concept.
However, if you prefer a more structured approach, there are five basic principles you can use as a guide for teaching your kids about money. Depending on the individual child, of course, you may want to ensure that your child understands these concepts by the time he or she reaches age 11.
Five Foundational Concepts
- Names and values of each monetary denomination–know the difference between the four major U.S. coins (penny, nickel, dime and quarter) as well as the major bills: $1, $5, $10 and $20.
- Counting money and making change–be able to see what something costs, count up that amount and count the change, if any.
- Financial stewardship–learn the importance of keeping money safe, and face the consequences of carelessness.
- Value of goods and services–understand that things costs money.
- Where money comes from–realize earning potential and the power of saving.