Teaching Kids About Money: Goals by Age

Teaching Kids About Money: Goals by Age

You're probably no stranger to setting goals. You may have had the goal of graduating from college or buying a home. Maybe you've achieved your goals; maybe you're still working on them.

You may not have thought about teaching money matters to your kids in terms of goals, but it helps to do so. Setting goals helps you measure your (and your child's) progress.

Set goals that you want to see your child achieve. The goals you now decide on depend in part on the age of your child and what she already knows. You can always adjust your personal goals as you go along.

Experts differ on what they believe to be minimum achievements for a particular age. One expert suggested that a child's money education should start as soon as he's old enough not to eat the money. Another expert favored savings plans for preschoolers.

You, of course, can set any goals you want. Here are some you might consider as minimum achievements for a child's age. When your child completes an age category, test his money knowledge to make sure that he has mastered the goals you've set.

• Ask him questions. See whether his answers show that he has achieved the different goals.
• Watch her in action. Doing is even more powerful than saying. Put her to the test to see if she succeeds.

Goals for Kids Age 6 to 10

Kids starting elementary school are outgrowing the myths of early childhood—the tooth fairy, the Easter bunny, and even Santa Claus. It's time to start learning the realities of money.

If your kid falls in this age category (essentially elementary school age), you want to be sure that she masters certain basic money concepts:

• Identifying money. Make sure that she knows the difference between a nickel and quarter.
• Making change. Make sure that she knows how to present enough money to cover a purchase and to count her change.
• Being responsible for money. If she loses the dollar that was in her pocket, she has to know that it's her loss (you won't replace it). This will teach her to be more careful in carrying money.
• Understanding that things cost money. From the candy she eyes at the supermarket checkout counter to the premium movie channels on TV, she must know that nothing comes free.
• Handling an allowance. Make sure that she learns to live with the allowance she's given and to meet any expectations for it that you might set. For example, this may include a modest savings plan to pay for things she wants.