Mom! I want this robot!
– Hey guy! It is not so simple.
That is what the children of the most recent Generation Z (born between 1995-2015) probably heard as they grew up. They have lived at least two economic shocks and have witnessed how their parents had to deal with them and find creative ways to overcome dark times. The optimistic result is that children have unprecedented potential in terms of financial education. Statistics now say they could become the most hardworking and effective employees in their expenses and savings!
Imagine what they can do with this statistical potential if you start helping them become familiar with finances at an early age! The responsibility is yours, so stay strong, learn together with the children and be the best role model for them. We have prepared tips for each age period, as well as universal monetary laws.
Teaching Plan for Age Groups
Do not feel lost! Here is a step-by-step guide that will help you consider the peculiarities of age when teaching your young children, pre-teens and teenagers about money.
From 3 to 4
The brain, speech, motor skills and social skills develop at a rapid pace. This period is the most favorable for learning new but basic notions. Why not introduce finance? Your child already has needs: a delicious snack for a road trip, a fashionable toy or a teddy bear for quiet nights. My 4-year-old son once asked me for his own oven to make a birthday cake. What an ambition!
Well, it’s time for you to explain to children how they can get goods or services in exchange for money. However, remember that if you start as a financial guru on Wall Street, you will fail. Get ready to have fun and learn by playing. Start with real money; Let your child realize what bills and coins are like.
From 5 to 7
You are still the role model, and children look at you in all questions related to money. Now, when they know what money is like and how the payment-obtaining philosophy works, you can explain how you earn money and how they can start getting their first coins and save to acquire what they want.
The practice role-plays about the professions and gives them some money for chores at home. This age is perfect for the first assignments to carry out those tasks. For example, set a fixed amount that you will pay to sort clothes, clean, feed pets and prepare simple snacks. Be creative to encourage your children to make small buying decisions and teach them how to save to fulfill their dreams.
From 8 to 10
It’s time for the first money management lessons. The game mode is still very efficient. Try board games like ‘Monopoly’. It will teach children notions like strategy, investment, overview, impulse purchases and many other money situations that you want to show them. They can make a small budget together to show that the funds saved help plan long-term goals.
Let your children be creative in the way they earn money. Let them invent jobs and have them receive payment for them. You never know when an entrepreneur or scientist is born into a human being! With the money earned, savings and allowances you give your children a little independence. Discuss the things you want to buy. If the purchase turns out not to be wise, teach them to identify and accept the fault.
11 to 13
You’re dealing with pre-teens – those creatures that are no longer children but not teenagers yet. Although they want to be treated as adults, they have little understanding of what is the responsibility of their money choices. Talk about the distribution of your assignment between your needs and your wishes.
Plan the budget together by taking the purchase of clothes as an example. Make a list of the essentials that children might need and let them buy a part independently. You will show that you trust your ‘little adults’ and they will feel super satisfied with their new look.
At this age, you can begin to explain what happens when a person runs out of money. The notions about borrowing, credits, debts, and interests should be familiar to your children.
From 14 to 16
You have a real teenager in your house. The period in which your ex-child is entering is a challenge in psychological, physiological terms and group pressures. The decision to buy something is now dramatically influenced by friends, celebrities, TV shows or any other source of fashion outside the family.
Talk to your teenagers, listen to them sympathetically. If you do not agree with an expensive purchase, tell them why it is not possible for your budget for now. Explain that the things that can be bought do not define them as individuals, but rather their personalities, hobbies, and dreams. If the need to spend is still strong, encourage them to work part-time. They can experiment with different jobs, feel how difficult it is to earn money and enjoy the funds earned.
This period is also fruitful to discuss plans for post-school education, such as a university, an institute or any other option available in your country. Start saving together with a view to future academic achievement. Even if your son or daughter’s contribution is insignificant, they must understand the value of their successful future.
From 17 to 18
Teenagers are now on their way to becoming young adults. The pressure of their groups is replaced by the stress caused by competition in educational institutions. The boys are about to make important decisions for their lives and you, as a parent, should always be there for them. Stay tuned to your children and don’t make their wishes as a joke. The balanced environment not limited by the school can only help them stay less nervous and open to new hobbies and opportunities. Explain that a particular university is a decisive factor. They can achieve what they dream in life by traveling different paths.
Promote summer jobs. They can make your teenagers feel safer, keep them busy and receive payments from someone else instead of their parents.
Talk about long-term goals and ways to save for them. It is a fruitful time to also talk about investment options. Encourage kids to dream big and find ways to get closer to their goals.
5 Universal Tips
Although the approaches to teaching money are different for each age, some basic concepts are generic. Make sure your children learn them by heart!
Money does not grow on trees
Although it might be nice to go and collect $100 from a money tree on the way to school, the universe doesn’t work this way. People earn money through work, and then they can exchange it for goods or services.
Needs vs. desires – not all purchases are equally important.
Children need to learn to prioritize obligations (needs) such as food, shelter, and transportation over things that make life more pleasant (desires) such as travel, fashion clothes, movie nights or coffee to go.
Try to make a collage with images of products that your children dream of and mark each one with an N (needs) or D (wishes). Then explain to them how they need to find a balance and pay for everything with proper planning and budget.
Spend money wisely
Children should be responsible for their money and learn the concept of “why pay more.” Even if on TV they keep repeating that a particular expensive device will make the child a rock star at school, it may not work that way. Teach kids to compare products and analyze the ads with them. Open a magazine and discuss what was announced. Explain to them how people sell it, what images they use, how they attract attention and what words they select for the consumer to think that the product is unique and irreplaceable.
Think big – save for the future.
Saving should not be associated with a load. Therefore, try to connect this notion to dreams. People should not save for good but for their goals.
Be creative and flexible about earnings.
It promotes the natural ability to think outside the box. This ability will help not only to make money decisions but also to make life more calm in general. You can train creativity with everyday activities, such as creating things they can find at home and remodeling them into something new and functional.
As an adult, you could also dig a little deeper and learn other money laws that could help you with the budget.
Parents – keep it up! Your children will be fine – they will travel, speak different languages and save some money in their ‘piggy banks’ for you. Be open with your children about money: speak it, present it at an early age, allow your descendants to dream and motivate them to make wise financial decisions by their own example. Make money stay in your minds and not in your hearts!