Illustration for article titled An Age-By-Age Guide to Teaching Kids About Money

Photo: Nadia Leskovskaya (Shutterstock)

In my experience, this is the age that kids really get into the concept of earning money themselves, if they haven’t already. They may be running their own lemonade stand (or neighborhood franchise?) by now or thinking of other things they could sell, whether it be personalized drawings, hand-drawn comic books, or colorful painted rocks.

My pre-teen nieces once set up a “store” full of their original artwork at my parents’ house, and you better believe we all took turns walking through and purchasing a slew of treasures—they even made personalized bags and receipts, which was a nice touch. We got some fun stuff to take home, and they made a hefty profit. (Their aunt, it turns out, will pay top dollar for their creations.)

If ever you’re going to have a yard sale, this is when they’ll be the most into it—and it’s a great way to teach them about determining the value of something, organizing and displaying items for sale, and negotiating with a buyer. Enlist their help and split the profit with them (or divide up the profit into piles for the family as a whole to spend, save, and give).

At this age, you should start talking to your kids about how you decide what you spend money on. “Being able to afford it” and “choosing to spend money on it” are two totally different things, and it’s at this age that kids can really start to grasp why you prioritize spending in one area over another. They can practice this themselves when you take them to the store with $25 of birthday money burning a hole in their pocket. They might have to decide whether to buy the small LEGO set they can afford or save up a few more weeks’ worth of allowance to get the bigger, more impressive set—or whether to spend that money on one big toy versus several smaller items.

This is also a good age to introduce the concept of longterm savings for bigger items. Around age nine, we started opening up our son’s monthly college savings statements in front of him (I get the paper statements mailed to me expressly for this purpose). He’s math-minded and interested in anything numbers-related, so each month, we talk about how much has been saved, how much it increased from the previous month, and “how much college that will get him,” which is always his follow-up question.

I remember my own parents doing something similar with me, and not only did I appreciate that they thought I was mature enough to share it with me, it also was a low-key, easy way to introduce some rudimentary discussions about investing.