Helping Youth Understand Money

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Once youth learn how to manage money, they gain an ability that is critical to making their aspirations a reality – and getting their dreams to life. Parents and other adults can support children in learning and developing money management skills by talking to them about money, planning together, and creating meaningful learning opportunities. There are a lot of different ways to help kids become aware of spending, below are some tips to help parents get started. 

How Parents/Guardians can help:

  • Children watch how their parents use money and how they talk about it. What they see and hear has an effect on their attitudes and beliefs.
  • Establishing a budget before going shopping and sticking to it
  • Being transparent about saving money towards expenses such as holidays, a new car, education funds, and retirement.
  • Trying to avoid “retail therapy,” or shopping to make yourself feel better.
  • Holding monthly family meetings to address money matters and set short-term and long-term financial targets.

When talking with young children from ages 3 to 5 about money, consider the following:

  • You have to have money to purchase things. Work with youth to help them identify coins and their values. Communicate how you may value something that is free, such as playing outside. Also, acknowledge the items that cost money, such as ice cream, gas for the car, or clothes. 
  • Explain that money is earned by the work we do. Discuss your job to your child and describe what you do. Go outside for a walk around the neighborhood or town and highlight people working, such as a grocery store cashier and police officer. Another idea would be to focus on entrepreneurs who have started their own business. Encourage your child to think about how they could earn money by turning a hobby into a business like baking cookies. 

When talking with young children from ages 6 to 10 about money, consider the following:

  • Be sure to include your child in some of your small money decisions like explaining why you choose one item over another at the grocery store. Very important to highlight comparing prices and shopping for the best buy.
  • Give youth the option to pick between two or three items in making a purchase. Providing an opportunity for choice and making decisions is important, but limit the number of items to choose. 
  • Introduce bank savings accounts and how it will help protect their money and pay them back in interest. Some banks and credit unions have programs and accounts for youth to help them start saving. 

When talking with young children from ages 11 to 13 about money, consider the following:

  • Work with youth to plan out a spending plan based on their available money. Mention all financial goals and the need for budgets to help guide money decisions.
  • Give a small, consistent allowance. Plan how to save this money and make spending decisions together. Earning an allowance can help youth understand that money is made by working. Thoroughly plan this out and discuss expectations. 

When talking with young children from ages 14 to 18 about money, consider the following:

  • Address how they earn and save money, as well as how they set short-term and long-term targets that are important to them.
  • Offer advice on budgeting and planning, handling checking and savings accounts, using credit, and sticking to financial goals. Establish and maintain a checking account, as well as hold monthly meetings to review budgets and financial decisions. Use a budget to keep track of your income and spending, as well as your steps toward your financial goals. Teach youth about the true costs of credit.
  • Discuss healthy spending habits to avoid overspending.

Money As You Grow Infographic

Money As You Grow: Consumer Financial Publication Bureau (CFPB)

Written By

Shae King, N.C. Cooperative ExtensionShae KingExtension Agent, Family and Consumer Sciences Call Shae E-mail Shae N.C. Cooperative Extension, Forsyth County Center
Posted on Apr 6, 2021
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