Five Things You Can Teach Your Elementary School Child About Money

Your child’s relationship with money starts early, whether you realize it or not. Even before they hit those teen years, they’re aware that money is an important topic.

Depending on the child — and your financial situation — they may be aware of how much money your family has in relation to their friends’ families, and they may already have sense that money is a stressful or controversial topic in your family.

Proactively teaching kids about money is one way to ensure they have a healthy relationship with it. It’s never too early to teach these basic principles.

Money Is Earned

This may sound obvious but most kids get given money for the strangest things, like losing a tooth, or maybe just because they ask for it. That’s fine, of course, but kids also need to learn early on that most of us will need to show up, work hard and expend effort in order to earn money.

You don’t have to force your kids into the labor market, or even pay them for chores, unless that works for your family (because there are pros and cons to paying kids for contributing to their household).

You can however teach your children from an early age that there’s a relationship between money and work. That adults go to work in order to pay for things, and that how much you work has to be balanced against how much leisure time you have, while also being able to afford the things you want.

Even while your kids are young, you can talk to them about work and money, and which kinds of work will result in a good salary and which won’t. But try not to do your kids a disservice by repeating the tired old advice that they should “work hard at school and go to college”.

It’s true that most college degrees are worth it in the end. It’s also true that there are highly paid jobs that don’t require a degree at all. If you’re raising kids, talk to them honestly about how the world of work operates, how important education is, and the various ways that people earn money in the real world.

Money Should Be Budgeted

While learning to earn money is important, what you do with it once you have it is — in many ways — more so. Learning to make a budget and stick to it is a vital skill and the smallest of children can learn it.

When you’re six — believe it or not — making a budget can actually feel like a fun game, and you can do it with your kids, whenever they get their pocket money, birthday money, or even that money the tooth fairy slips under their pillow.

Help your child decide how much to spend now and what to spend it on, as well as how much to save for later. This can start with a piggy bank or coin jar at a very young age, but it’s also never too early to set up a child-friendly bank account so they can get used to looking at the numbers and understanding that’s real money their accumulating.

Money Should Be Saved and Invested

Saving for specific goals has become somewhat of a lost skill in a world where everything from a car to a fancy meal can be bought with credit.

Help your young child set goals for things they want to save for, like an expensive toy or other item. And teach them the value of having a general reserve of savings in case they see something they want to buy.

Investing might be a bit beyond the average elementary school child, but if you’ve opened that junior account for them, you can start by teaching them that the extra few cents going in every month is the interest they’ve earned from investing their money.

As they get older, talk to them about different kinds of investing and what types they might want to consider once they have a wage of their own.

Money Is for Spending

Most of us assume that spending money is easy, but spending it well is actually a skill that many adults lack, and it in some cases it’s the root of all their problems.

Many of us overspend on stuff we don’t need. Others of us may actually underspend, being too miserly and not fully enjoying our lives in spite of a decent disposable income.

So spending money well is a skill to be developed, and you can start this one young too. Mindful spending is the goal, and this can be taught, from a fairly early age.

It ties into teaching your kids to save, with a future spending goal in mind, and talking to them about why they’re saving for a particular thing or experience. Will it make them happy? Provide endless fun and enjoyment? Or is it something they want just because everyone else has one?

And Money Is for Giving

Giving is arguably one of the best things you can do with your money. It makes the world a better place, and actually makes you happier too. What’s more, planning (and budgeting for) your giving allows you to give generously, knowing you can afford it.

Teach your kids to identify causes they care about, and budget a little of their money to donate to them. Or help them get involved with activities to raise money for the charities and community events they want to contribute to.

No matter how young your child, there’s probably an age-appropriate way of improving their relationship with their money and setting them up for a happier and more financially secure life.

About the Author

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen