Ages and Stages: Teaching Your Kids about Money

As parents, we strive to do what is best for our kids — to ensure they have the know-how they need for financial success.

Image courtesy of photostock / FreeDigitalPhotos.net

Image courtesy of photostock / FreeDigitalPhotos.net

So, we gathered our brain-power here at the LSS Center for Financial Resources to come up with financial skills to teach kids (according to their age):

Age 3-4

  • Identify coins & bills in their correct name
  • Know how many cents each coin is worth
  • Trade coins for something when you go shopping

Age 5

  • Start managing a small allowance
  • Know where money comes from (work)
  • Know that banks help keep our money safe until we need it

Age 6

  • Understand coin equivalents
  • Make simple change
  • Divide allowance between spending, saving and sharing.

Age 7

  • Read price tags & look for things on sale
  • Make appropriate amounts of money for things to buy.
  • Make sure he/she receives correct change for a purchase.

Age 8

  • Recognize that TV commercials aren’t real life
  • Save toward a short-term goal (no longer than 1 month)
  • Realize they can earn money by doing extra jobs

Age 9

  • Keep a money diary
  • Compare prices when shopping
  • Cooperate with family efforts to save water, lights, gas, etc.

Age 10

  • Save a small amount each week for a large purchase.
  • Ask questions when considering a purchase
  • Look at value, not just the cost of products.

Age 11

  • Understand the principle of compound interest
  • Understand fixed expenses and flexible expenses
  • Adjust flexible expenses to stay within a spending plan

Age 12

  • Understand and use correct terms for banking transactions
  • Understand the value of wise investing.
  • Operate a small business enterprise for one month.

Age 13-18

  • Open a checking and savings account & understand fees
  • Balance a checkbook
  • Create a budget on their own that meets all their expenses
  • Stay on a budget for 6 months w/o asking a parent for help
  • Understand the costs of using credit cards
  • Obtain a credit report
  • Know how to read a lease & what to look for before signing it
  • Know how to shop around and obtain insurance
  • Know how to file a state and federal income tax form
For more information on this topic, contact LSS Center for Financial Resources. To enroll in a session of “Raising Money Smart Kids”, call 605-330-2700 or 1-888-258-2227.

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