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When To Start Teaching Kids About Money: A Quick Guide

July 24, 2024

Teaching kids about money is crucial for their future financial success. By learning about money early, children develop good habits that last a lifetime.

Bright Futures Indiana says children's brains grow the fastest from birth to age five. And, by the time kids start kindergarten, 90% of their brain development has already happened._[1] This suggests that the earlier you start, the better.

Let’s explore the best times and methods to introduce early financial lessons to your kids.

Why Teaching Kids About Money is Important

Understanding money helps kids make smart decisions. It prepares them for adulthood when they'll manage their own finances.

Among other benefits, teaching financial literacy early can:

Reduce long-term stress.
Prevent debt.
Promote independence and responsibility.

Money skills are as important as reading and math. When kids learn how to budget, save, and spend wisely, they are more likely to grow into financially responsible adults.

Studies show that financial habits form early. According to a Cambridge University study, money habits are set by age seven._[2] Starting early helps ensure these habits are good ones.

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What is the Best Age to Teach Kids About Money?

Kids can start learning about money as soon as they can understand basic concepts. We suggest starting as soon as kids can grasp simple ideas like counting coins. At this point, you can teach the value of different bills. For example, a toddler can typically learn to identify pennies, nickels, dimes, and quarters pretty easily.

As kids grow, their understanding of money can expand. Consider introducing simple concepts early, then working up to more complex ideas. For example, after counting and bill identification, you might teach your child about saving and spending. Next, you might introduce more complex ideas like earning and budgeting through chores or small jobs.

What Grade Do Kids Learn About Money in School?

In Indiana, financial literacy is increasingly being introduced in elementary schools. Many schools aim to include money lessons in early grades, often within basic math. Some educators use toy money or bills for counting as early as preschool.

By middle school, students typically learn more detailed financial concepts. Schools may offer special programs or workshops on financial literacy. These can include lessons on budgeting, saving, and even credit basics.

Indiana high schools are now required to include personal finance instruction in their curriculum. This is so students have a basic understanding of money management before they enter adulthood. Starting with the 2028 cohort, all high school students must complete a course on personal financial responsibility to graduate._[3]

If you need confirmation about financial literacy programs in local schools, consider checking with your local school district or the Indiana Department of Education.

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How to Teach Your Children About Money

Teaching kids about money can start early, even with simple math skills like counting. The earlier you start with basic concepts, the sooner you can introduce important financial literacy skills. Here are some fun and effective activities to help young children learn about money at different ages.

1. Count Coins and Bills (Ages 2-5)

Start by teaching young kids to recognize and count coins and bills. Use real or toy money for practice. Make it fun with games that involve sorting and counting different denominations. For example, you can play shop. Let your child match coins to pictures of the same coins or count out change for a pretend store.

2. Use a Clear Jar for Savings (Ages 3+)

A clear savings jar allows kids to watch their money grow. This visual aid reinforces the concept of saving. Encourage your kids to set small goals, like saving for a toy, to make the process rewarding. For example, if your child wants a $10 toy, help them count their money each week and track their progress toward the goal.

3. Read Money-Themed Books (Ages 3+)

Reading money-themed books helps kids understand financial concepts in a fun way. For example, you could read "The Berenstain Bears' Trouble with Money" with your toddler. This book teaches lessons about earning, saving, and spending in a story format. After reading, discuss the story and how the characters handled their money.

4. Start an Allowance (Ages 4+)

Giving an allowance helps kids learn about earning and saving. Start with a small amount, like $1 per week for a 4-year-old. Increase the amount as they grow older and take on more responsibilities. For instance, a 5-year-old might earn $1-2 for simple tasks like setting the table. Meanwhile, a 10-year-old might earn $5 to mow the lawn.

5. Explore Local Fianancial Education Events (Any Age)

Indiana offers diverse opportunities for kids to learn about money:

Children’s Museum of Indianapolis® features exhibits on economics and money management, offering hands-on learning.
Indiana Public Library offers programs on budgeting, improving credit scores, and making informed financial decisions. It also provides access to a wide range of finance-focused ebooks and audiobooks via OverDrive.
Lake County Public Library hosts financial literacy classes that cover banking basics, budgeting, saving strategies, and credit. These include interactive sessions like "Decoding Credit with Jenga."
EVERFI’s® Financial Literacy Month provides no-cost resources for different age groups in Indiana schools. They cover topics like banking, budgeting, and investing.

These activities help kids of all ages gain essential financial skills for managing money responsibly. For more resources near you, look to your local libraries and financial institutions.

6. Help Older Kids Sign Up for a Student Checking Account (Ages 14+)

For older kids, a student checking account is a great tool. It teaches them about managing money in a more complex way. Centier Bank offers a student checking account that’s perfect for teenagers. After you open an account, a new world of financial learning opens up. Walk your child through how to use the account, deposit money, and track their spending.

Give Your Child a Brighter Financial Future With Centier

Teaching your child about money sets them up for a successful financial future. With Centier Bank, you can find helpful resources and tools to make learning about money fun and educational. Centier is here to support you.

You can start with a student checking account to teach them about managing their own money. You can also explore our savings options to show them the importance of saving for their goals.

Start building their financial skills with Centier Bank. Learn more about our student checking accounts today.

Sources:

[1] https://brighterfuturesindiana.org/blog/top-five-benefits-of-early-childhood-education

[2] https://securities.sos.in.gov/moneywise/budgeting/raising-moneywise-kids/

[3] https://www.in.gov/doe/students/indiana-academic-standards/financial-literacy/