We often think that only adults – at least young adults – handle money. If that had been true, it certainly isn’t today. The latest CBS News survey reveals that companies today will spend at least $17 billion marketing to kids. PBS estimates that teens will spend about $155 billion this year. That is a lot of money! So armed with these facts, here is some expert advise as to how to teach your kids to handle money.

AGES 3-5

This is a great age, and it isn’t too early, to begin to help your kids get familiar with coins. Let them play with dimes and quarters and nickels. They may think the bigger they are, the more valuable they are. And that is okay. Over time, as they handle them and play with them, they will understand the “real world” value of each coin. This is also the age we teach our kids about waiting – waiting in line and not cutting in. This is also a great age to talk about waiting to spend money. They are learning both the value of money and the value of holding onto it. This is the first lesson in learning about investing. And it is never too early to teach one of the most valuable life lessons – delayed gratification.

AGES 6-10

At this age, many parents introduce the concept of an allowance. This is the time where kids begin to learn to save now for something they want in the future. This is where you help your kids make decisions about what they do with the money they are given. But be careful not to force this process. Allow kids to save if they want. But if they choose to waste their money on candy and small items while saving for a big item, and then when they want to buy it and don’t have the money, you need to show tough love. Don’t bail them out or they will think the “real world” works this way – and we know it doesn’t! Too many adults haven’t learned this concept because they weren’t allowed to when they were kids.  Make sure you allow your kids to feel the pain of wasting their “savings.”  The goal here is, if they learn this valuable lesson when they are eight, hopefully they won’t have to relearn it when they are twenty-eight!

AGES 11-13

By this time, a foundation for finances should be established with your kids. They are now on the verge of being a teen-ager. What a scary thought for most parents! This is when money, saving and spending begins to get a little more serious. This is when they are beginning to spend some time away from their parents and will have money in their pockets and will decide for themselves how they will spend or waste their money. This is a great age to talk about comparison-shopping. This is when you can talk about the difference between name brands and generics and whether one is really better than the other. This is also the time to talk about what you “need” to have compared to what you “want” to have.  And finally, this is the age where you begin to introduce the concepts of long-term investing, interest rates and how to use interest in your favor and how to establish using credit in a responsible way.

AGES 14-18

At this point in their lives, your kids are beginning to prepare to become young adults and take on many responsibilities including driving, working at part-time jobs (even full-time during the summer), paying taxes, planning for college or a career and voting, just to name some. This is the time to review the basics of finances and continue to teach about money. This is a good time to talk or review things like budgeting, money management, the use of credit cards, how to open a bank account, saving for a “rainy day”, car-payments, the cost of living including renting an apartment or purchasing bigger items that may need to be paid off over time.

If your teen is planning to go to college, you need to talk seriously about the cost, how it will be paid for, what other costs will be involved (such as room and board, car expenses, etc). A good online tool for determining college costs is the U.S. Department of Education’s College Scorecard. Make sure your eighteen-year-old doesn’t leave home without being amply supplied with a good financial foundation.

Financial tips and downloadable money-management lesson plans for younger students can be found at the Take Charge America Education Library: www.takechargeamerica.org/

Source: Jeanne TepperGoBankingrates.com
Source: Patriot News, Harrisburg, PA