Our children are growing right before our eyes. At ages 7 (my son) and 5 (my daughter), they are learning more and understanding how the world works and how they fit in. It is important to my wife and I to teach them good money habits and knowledge. It seemed like a good time to see where our kids stand. Here are 10 important money concepts for kids, and where ours stand.
Knowing What Money Is
Both of our kids now recognize money, both paper and coins. They both know how to recognize American money, and understand that money is represented differently in different places.
Knowing That Money Holds Different Values
Our 7 year old ties his math skills with money, so he properly recognizes different amounts and how they relate to each other. Our 5 year old still sees all bills as equal and all coins as equal, but that seems fairly normal for her age.
Realizing Larger Amounts Than What They've Seen
My son has a $50 bill, and that's probably the biggest that he's seen. So, when he asks how much something costs and it's a really big amount (like a new car), he grasps the concept that money is a very big and far reaching concept. My daughter is starting to get this as well, but the size of numbers is something that she hasn't really learned. Both are where they ought to be.
Understand Money From Multiple Angles
Both our kids understand that money is earned and spent. This is important as, even at this age, they see that you don't just ‘get' money and that it comes from somewhere.
Get The Importance Of Saving
Our oldest definitely gets this. He loves setting aside his money for bigger things. This is definitely a change from even a year ago, when he would often think that he should go out and spend money because he had it. Now, he enjoys holding onto his money just as much as he enjoys spending it.
Our daughter is starting to come into her own in this area. For her, since she doesn't really recognize the different amounts, she just know that she ‘has money'. For her, as long as she has some, she's cool. I think both have a great foundation here.
This is one that both are working on. They both know that money has value, so if they see it lying around, they see a way to immediately increase their ownership. They don't go taking it from places where it's put away, but we've had a couple of times where we've found money in their rooms that they later admitted they found.
Know The Importance of Safekeeping
They both have a spot in their rooms where they keep their cash. They know exactly where to go to put their money and to go look to make sure their money is safe.
There will be no lost money with these two, I'm guessing! And that is a good thing.
Know When To Expect Money
Our kids both get an allowance. We give them a weekly amount equal to $0.50 for each year of their age. Friday is allowance day. My son knows this and will ask on Friday to make sure that he gets his allowance.
Are Giving With Their Money
My daughter really aces this one. When we talk wistfully about things that we would love (e.g. a big vacation, a new RV) but probably can't afford, she always offers that we can put her money towards it. Or, if she wants something (e.g. ice cream), she'll offer to pay for the whole family so that she can get her wants fulfilled! We don't take her up,
on these, but it's heartwarming to see her want to use her money to take care of her family.
Understand The Concept of Paperless Money
So much of what we do these days involves no actual money changing hands. We swipe a card. Paychecks get deposited directly into our account. We send a payment in.
I always worried that the shift to mostly electronic handling of money would be harmful to kids learning about it. But, our kids seem to get it. They understand that I go to work so that we have money. They get that we swipe a card but later have to pay for it.
All in all, our kids are pretty smart, including with money. I'm hopeful that we're helping them along the right path so that they grow up with a solid and wise understanding of money.
Readers, what do you think of where our kids are? Have I forgotten anything? What money lessons did your kids learn or do you wished they learned during the early years?