When you reach adulthood, you learn a lot about money through trial and error. One way or another, you figure out how to manage a budget, pay the bills, and save for big expenses.

Whether you realize it or not, you formed a lot of your habits, behaviors, and beliefs around money when you were a kid. If you had parents, teachers, or other adults in your life who set positive financial examples, chances are, you knew a thing or two that helped you manage your money better when you became an adult. 

The truth is, kids with adults in their lives who are willing to teach them healthy money habits will be better prepared to deal with money when they’re older. If you’re the parent or grandparent of an elementary-aged child, it’s time to start teaching them about saving and managing money. 

Why Talking to Kids about Money Matters

Kids will learn about money one way or another. Regardless of how much you actively teach them, they’ll observe your habits and behaviors around money and use them to form their own. 

By the age of seven, children are already forming an understanding of money and how it works. That means that elementary age is a great time to introduce lessons about money. With exposure to financial concepts, kids can develop healthy habits and beliefs about money that will carry them through adulthood.

Since money is such a crucial part of everyday life and success, it’s important to be intentional about teaching money management to children. You’ll find that simple lessons go a long way, and kids are usually eager to learn.

5 Things to Teach Children about Money (Plus 5 Fun Money Management Activities)

Most financial topics fit nicely into a handful of broader categories. While individual topics in these categories can be complex, the broader concepts — saving, earning, spending, giving, and managing — are pretty simple. In fact, they’re simple enough for your elementary-aged child to learn.

Below, we dive into five things you can teach your elementary-aged children about money, plus five activities to help make these lessons fun.

1. How to save

Saving is the basis for meeting any financial goal in life — like buying a house, going on vacation, and ultimately, retiring. While these big savings goals aren’t yet on your child’s mind, teaching children about saving money — even for something small — can help them build this much-needed muscle. 

Next time your child or grandchild mentions something they want, show them how much it costs in terms of actual, physical money. If it’s something they’re serious about buying, you can help them create a plan to save for it. 

Activity: If your children don’t already have a place to save money, help them make one. Younger kids can decorate a piggy bank or jar to house their savings. Older kids can, with a parent’s help, open a kids’ savings account at a bank or credit union. 

2. The power of earning

If you want your child to get a sense of money’s worth, it’s important to teach them about earning. The money they’ve earned — rather than money they’ve been given — will feel a lot more valuable when they decide to spend it on a new toy or treat.

Using an allowance system is a great way to begin to teach kids the power of earning. Set up a system together where they earn a small weekly allowance in exchange for taking on extra household chores. 

Activity: If your child is interested in other ways to earn — or has a particularly expensive savings goal — you can help them get started with an age-appropriate side hustle. Bake sales, lemonade stands, or even contributing to a family garage sale are all fun ways for kids to earn some money.

3. Smart spending

Spending is one area of personal finance that, to some degree, kids understand. They accompany their parents to the grocery store, the mall, or out to eat. They observe spending — and the behaviors that go with it — all the time.

Making conscious spending choices yourself can go a long way in helping your children form good habits. Spend some time teaching your children about wants and needs. Whether real or hypothetical, talk them through scenarios in which a limited budget forces the need to weigh these different types of purchases. 

Activity: Next time you plan to spend money on your child, turn it into a learning experience. Hand over the money and let them create the spending plan. (You may have to set some boundaries, depending on their age). For example, if you plan to spend $30 on their school supplies, let them select the items and manage the money. Use any opportunities to teach them about coupons, sales, and comparison shopping. 

4. The importance of giving

For many people, giving is an important part of personal finance. If it’s a value of yours, you can help your children get in the habit of giving at a young age. 

This is a great lesson to teach by example. Be vocal about how giving plays a role in your money management system, and explain why it’s important to you. Whether donating time, belongings, or money, you can explain how each way of giving has a financial impact. 

Activity: Help your child create a separate jar, piggy bank, or container for money they want to give away. Then have a discussion about giving — how much they’d like to give and which organizations they’d like to support. If they aren’t sure what to do with their donations, help them research charitable organizations online.

Take things one step further by helping your children come up with a plan — like a bake sale, for example — to raise money for a cause they care about. 

5. Daily money management

Money management is a crucial part of everyday life that many people, unfortunately, have to learn on the fly. But that doesn’t mean your children can’t start learning now. 

Like spending, giving, and many other financial behaviors, kids will notice how the adults in their lives manage money. If you talk about budgeting in front of them, they’ll see it as normal behavior. If you stress out while paying your bills, they’ll notice that, too. Vocalize your daily money management habits and use everyday moments to help your kids learn.

Activity: Give your child a portion of the week’s grocery budget and assign them the responsibility of packing their own lunches for the week. Help them create a grocery list that covers everything they need — knowing it won’t cover everything they want. Then accompany them to the grocery store and let them shop.

Learn How to Talk to Kids about Money + More with Five Pine

You don’t have to wait until your kids are teenagers to start teaching them about money. By starting to learn about saving, earning, spending, giving, and money management, your elementary-aged child will gain a solid understanding of core financial concepts that they can carry into adulthood. 

If you’re interested in not only teaching your child about money but hearing from professionals who can support you in your financial journey, we’d love to get in touch. Give us a call at 877.333.1015, email us at info@fivepinewealth.com, or visit our website.