Teaching school-aged children about money management

Young people who are given the opportunities to make a spending plan and implement it are more likely to develop good judgment about money.

Children who are given the appropriate opportunities to make a spending plan and implement it are more likely than others to develop good judgment about money use and learn to accept the consequences of their decisions. Below are some tips and ideas for parents to use with their school age children to gain knowledge on financial management.

Children often learn the best by doing. Let them be involved in the buying process. In the store, give children a choice of three items and accept their choice. Then, let them go to the sales clerk and pay for the item.

  • Suppose your child has just made a bad decision about spending their money. If he or she is unhappy, do not give them more money! We all learn from our mistakes.
  • Help your child understand the link between jobs and money. Family members work because the family needs or wants food, clothes, toys, etc.
  • By giving your children chores to do, without pay, they learn that they are part of the family and share in the house workload.

School age children learn to read, write and play by experience. They can also learn about money management through experiences.

  • Children can reinforce math skills by making change.
  • They are ready to help with the family shopping (making lists, tracking expenses in the grocery store)
  • Older children can help balance a checking account and address envelopes to pay bills or if you do it electronically show them how it is done.
  • Discuss reasons for buying, or not buying, family and household items.
  • Let children be a part of family, money decisions. Ask them: “What do you think?”
  • Give children opportunities to earn money.
  • Do not pay for good grades, chores or good behavior. These should be expected.

An allowance is a child’s share of family income to be used as the child chooses. Allowances help children gain experiences in handling money and making decisions about how it should be spent. With your children, decide how much allowance they should receive. You can determine this by:

  • Keeping records of money used during the week for lunches, bus fares, other school expenses and entertainment. Or sit down with your child and draw up an expense account deciding what items the child will pay for.
  • Help the child develop a simple record to track income and expenses.
  • The allowance can be paid weekly/biweekly.

Michigan State University Extension provides financial education to individuals throughout the state of Michigan. To learn more about local offerings, visit MIMoneyHealth.org.

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