You want your kid to be financially savvy. You know you can’t depend on the schools to teach them what you think they need to know. But you are a super busy parent, with work, continuing education, business travel, your kid’s other activities, church and the myriad of other things that demand your time and attention. How can you find the time to help your young child take the right steps towards financial literacy?

What Can Young Children (up to age eight) Learn?

As I prepared to hold a Money Camp for my young grandchildren last year, I researched various educational standards to review what kids can learn at various ages. Keep in mind that your child is unique and may be ready to learn different things at different stages in their growth. Use the below as a guideline only. It certainly isn’t an exhaustive list!

Birth to Age 3

One of the most important concepts for your child in these years is to learn to trust. Your care and love will teach them that as you fetch the bottle, change the diaper, hold them when they are afraid and etc.

Pre-Kindergarten (Ages three to five)

Kids this age can start to learn that we can get things by trading. They start to notice that you can trade toys, or trade money for stuff (like a ride on the grocery store pony or candy at the checkout aisle).

They start to recognize money and to be able to tell the difference between different coins and bills (but probably won’t be able to understand that the coins have different monetary values). They may start getting money for birthdays or for doing chores and may learn that they can save it, spend it and give it away.

They can learn that there are ways they can trade time and effort for money or stuff.

They are learning to count, sort and match things.

Kindergarten through third grade (Ages five to eight)

Kids in this age group can:

• Learn need vs. want.
• Learn the different values of the different kinds of coins and currency and recognize that other countries have different looking money.
• Understand that money is exchanged for goods and services and that different people do different jobs to earn money.
• Know that money is limited and people need to make choices between things.
• Make change.
• Know that a person can be a buyer and a seller.
• Start understanding vocabulary and concepts of economics – such as ‘resource’, ‘earn’, ‘income’, price, ‘currency’ and etc.
• Toward the eight end of the age group, kids start to get interested in earning money via their own business.

How You Can Squeeze Teaching these Concepts into Your Busy Day?

Where ever your child is on the learning continuum – here are some ideas on ways to teach personal finance without spending (much) extra time specifically on it.

Food Related

While you are planning meals.

Include kids in deciding on menus, listing ingredients and buying the items at the store. Talk about why you plan meals. Introduce budgeting concepts by talking about how much you allocate for groceries.

At the grocery store.

Have younger kids help you find the items, have older kids compare prices, or track them on a calculator as you go through the store. Explain how the checkout process works, point out the employees in the store and talk about what they do. Show the kids how you are paying and explain the concept (checks, cash, debit, credit, food stamps or whatever). Check the register receipt with them to show them how it lists out the items, the price and the taxes (a great opening to introduce the concept of why we have taxes). Let them buy something once in a while with their own money – making sure to count their change.

When you get home with the groceries.

Compare what was spent to what you budgeted – with the kids and explain what happens if you spend more or less than you planned.

While you are eating supper.

Talk about costs of cooking vs eating out, see if they can guess how much the meal cost you to make and how much it would cost if you bought it at a restaurant.

At McDonald’s.

Point out all of the various people working there and help them figure out what they are doing. Let them buy their own meal (counting the change). Show them the big truck that pulls up with hamburger buns, frozen fries and etc and talk about where the food comes from.

Preparing for bed.

In the bath.

Wash some pennies, count them, sort pennies from nickels and quarters.

At bedtime.

If Daddy’s late or Mommy’s out of town on business – talk about what your spouse does, why they have to be late or out of town once in a while and how family uses their salary. If your child is ready, talk about the travel industries – who works in them, how they make money, and how much it costs you to use the different kinds of transportation. Talk about why companies send employees on trips – introducing the concept of  the global nature of business.

Read books on money and jobs such as Busy Day, Busy People or The Berenstain Bears, Trouble with Money.

Make up a bedtime ritual that helps them learn a new fact about finances each night or each week – such as a money counting board – with a dime and 10 pennies glued to it (plus other combinations) or a song about money values.

In the Car.

Going to the babysitter.

Talk about why you take your child to a sitter or center, why the sitter or center takes care of kids, what their costs are, how they get income and who works there for a salary.

Suggest to your caregiver that they use pretend play during the day (especially with the preschool crowd), to play store, or set up a pretend business such as a bakery, pet salon and etc. My grandkids were 6 and 3 and they really got into this! We used real coins and Monopoly bills and their toys as store merchandise.

Going to school (if you drive your kids).

Talk about how the schools are run and who gets paid and who pays for what. Let them count their lunch money. Talk about keeping their lunch money in a safe place. If they don’t use lunch money, talk about how their lunches are paid.

Buying gasoline.

Talk about various car expenses, besides gasoline, like oil, windshield washer fluid, mechanics, tuneups, tires, car payment interest and etc. Show them how to pump gas and how the pump shows what you are putting in. Talk about where the gasoline comes from and the various jobs related to producing it.

On trips.

Sing songs that help young kids learn coin values. Make up stories about businesses you see along the road – what they do, why it is needed, who uses it, how it makes money, who works there and etc. Talk about costs of maintaining the roads, how the cost is covered, and what jobs are related to highway building and maintenance.

Entertainment Related.

Seeing a movie.

Let them watch you buy the tickets and pay for the refreshments. Talk about the relative cost of both. If you save money using passes or coupons or something talk about that. If they are old enough, let them research the prices at various theaters and in various mediums – maybe the film is showing at a discount theater or on pay per view or Netflex or is already released on a dvd.

Check with the theater manager to see if they will give you a quick tour of the place to see behind the scenes – projector room, concessions, ticket booth and etc. Point out any employees working in the areas – and talk about what they do and that they get paid for it. Ask the manager to explain what costs there are in running the theater.

While you wait for the movie to start – talk about how a movie is made, costs involved in doing so, the roles involved (producers, directors, actors, camera men, scene builders, computer techs and etc). Speculate on how the movie makes money and what costs might be.

While planning your vacation.

Let your kids help you plan. Set a budget, break it down to categories for the trip – let kids help research places to go, miles or ticket costs to get there, things to do, places to stay and etc. Work in a discussion of needs vs wants.

Around the house.

Working on chores.

Get help around the house from kids by offering chores – dusting, mopping, raking leaves, pulling weeds, mowing grass, doing dishes, doing laundry and etc. Compensate kids as you think right – allowance, pay per chore, no pay for normal but do pay for extraordinary, etc.

Watching TV.

Explain commercials to them as you watch some. Talk about why companies advertise, how the commercial is impacting you, what the company does, how the kid can find out more about the company, invest in the company and etc.

Playing games on family game night.

Play board and online games that teach money or finance or business concepts. Here are a few of my picks:

What Do You Do to Teach Your Young Kids Financial Literacy?

Other Free Sources of Help

• Video – Elmo counting coins – great for pre-schoolers
• Video How New US Mint Coins are made – great for 2^nd and 3^rd graders 
• Practical Money Skills for Life website – Cash puzzles  
• Kids Money. Org – Various resources to teach personal finance
• Federal Reserve Bank of Cleaveland online activities 
• My Favorite Online money games for kids of various ages