5 Age-Appropriate Money Lessons for Kids
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Ideas include taking your child to work, and creating a list of kid-friendly chores. "Together, decide on small chores they can do to earn extra money and set a ‘wage’ for each one,” she says. “Older children can even give you an invoice at the end of the week."
Wants Versus Needs (age 8-12)
Kids much younger than 8 (and many adults!) have trouble grasping this distinction. Make a list of items that you commonly purchase, everything from bread to comic books. Have your child rank each on a scale of 1 (just nice to have) to 10 (need to have). Discuss their rankings without making them wrong.
Other ideas include sharing with your child a list of your personal "wants" that you are delaying for other priorities. "Share the list with your child and explain your reasoning. Encourage them to make their own list," Yellen suggests.
Understand Impulse Buying (age 8-12)
It's critical for older kids to be aware of how Madison Avenue is trying to manipulate them. Yellen recommends critiquing commercials while watching TV with your kids. Ask them what advertisers are trying to get them to do. What is the underlying message? What are they saying will happen if you buy or don't buy that product? How does the product in real life (i.e., that Big Mac) look compared to the advertisement?
Parents can also offer kids "now versus later" deals to teach them the value of delayed gratification. "For example, offer your child $5 today or $15 in two weeks,” Yellen suggests. “Which do they want? Talk them through the decision. And if they decide on the $5 today, check back with them in two weeks and ask how they feel about that decision."
Pamela Yellen is a financial investigator and the author of two New York Times best-selling books, including her latest, The Bank on Yourself Revolution: Fire Your Banker, Bypass Wall Street, and Take Control of Your Own Financial Future. She investigated more than 450 financial strategies seeking an alternative to the risk and volatility of stocks and other investments, which led her to a time-tested, predictable method of growing wealth now used by more than 500,000 Americans.