When you're teaching kids about money, it's always interesting - and at times amusing - to see the concepts take hold in their minds. The way they think about money reveals an endearing, faulty logic about where money comes from and how it's used, not to mention its value. And while children need time and patient teaching in order to absorb money ideas, most childhood learning experts we've talked to say that there really isn't such a thing as "too early to start."
It's really 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 a question about money, use it as an opportunity to have a discussion about that concept while it's on their minds.
However, if you prefer a more structured approach, there are five very basic principles you can use as a planning tool for teaching kids about money.
Five Foundational Concepts
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:
- 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 when you don't have the exact amount.
- Financial stewardship - learn the importance of keeping money safe, and facing the consequences when you're careless.
- Value of goods and services - understand that things costs money.
- Where money comes from - help your child understand that he or she can get paid to work - perhaps it's an allowance from you - and can save that money toward goals.
Learning to Save Early
As parents start teaching kids about money, many are surprised at what their children learn and how fast they learn it. With interest rates that are among the most competitive available in the country published by RateCatcher, Ally Bank is here to help you reach your savings goals.
Visit AllyBank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.