Debra Pankow, Ph.D.Sean Brotherson, Ph.D.

Children and Money• Children are not born with

“money sense.” They learn about money by what they see, hear and experience.

• One of the most important lessons you can teach children is positive money management.

Talking to Children About Money

Program Objectives• Build awareness of healthy

money management habits in adults and children

• Encourage parents and other adults to assist children and teens in learning about personal finance

• Foster dialogue among parents/adults and children on money management issues and skills

• Learn about and implement practical strategies for developing money management skills and knowledge in adults and children

Talking to Children About Money

Helping Children Understand Money MattersRegular discussions about financial issues and using family income can help children realize:

• The difference between wants and needs

• Resources, including money, are limited• Planning helps the family use money

more effectively• The value of setting financial goals,

planning how to reach goals and working together

Talking to Children About Money

Developing Money Management Skills in Children

Parents and caregivers can begin to develop children’s money management skills through:

• Guiding and supervising money choices• Praising for positive efforts (saving, etc.)

rather than criticizing• Not using money to reward or punish• Participation in routine family chores• Modeling good money management skills

(saving, using a budget, etc.)

Talking to Children About Money

Developing Money Management Skills in Children• Discussing money issues

regularly and agreeing on short- and long-term goals

• Demonstrating a balance of spending, saving and sharing family income

• Knowing and practicing consumer rights and responsibilities

• Being consistent, fair and willing to share ways to improve money management in the future

Talking to Children About Money

Talking to Young Children (ages 4 to 8)

Teach young children (ages 4 to 8) what money is and how to use it:

• Help young children learn the value of money.

• Allow a child to choose from two or three items in making a purchase.

• Take a child shopping with you, along with a coin purse, so he/she can buy an item.

Talking to Children About Money

Talking to Young Children (ages 4 to 8)

• Talk about the things that family members work to pay for, such as food, clothing, housing/rent, household items or gifts.

• Teach the value of generosity: sharing money with a friend or sibling, donating to a local charity, etc.

• Help young children understand that not all work results in pay.

• Discuss basic math concepts and skills with young children (counting, adding, etc.).

• Explain that money is limited and you cannot buy all the things they see on TV.

Talking to Children About Money

Talking to Adolescents (ages 9 to 13)

Talk to adolescents about their questions and interests regarding money:• Respond to questions children may have about

family finances or money in general.• Discuss the importance of saving and

using money wisely; open a child savings account.

• Give your child a small, regular allowance to save or spend wisely.

• Allow children to work on special tasks to earn money; plan a budget together.

Talking to Children About Money

Talking to Adolescents (ages 9 to 13)

• Explain the importance of working hard.• Let children have the experience of buying

and paying for something they want to help them learn the value of money.

• Visit the grocery store to look at prices of food items and plan a meal that is affordable and healthful.

• Encourage children to seek small employment opportunities, such as garden work, mowing the lawn, shoveling snow or child care.

Talking to Children About Money

Talking to Teens (ages 14 to 18)For teens, money can be important for self-support (buying clothes), social activity and personal freedom. Consider the following: • Explore teen interests in

earning and managing money, and making more of their own money decisions.

• Set short- and long-term financial goals (saving for college, etc.).

Talking to Children About Money

Talking to Teens (ages 14 to 18)

• Teach careful budgeting practices to cover current needs and future plans.

• Encourage teens to participate actively in family discussions about money, spending and family financial decisions.

• Provide guidance on planning and budgeting, managing checking and savings accounts, using credit and keeping financial records.

Talking to Children About Money

Talking to Teens (ages 14 to 18)

• Help teens learn about the purposes, services and charges or fees associated with banks, credit unions, loan companies and other financial institutions.

• Help teens be aware of spending patterns that might lead to overspending, as well pressures that might induce them to spend money.

• Work with teens who hold part-time employment or make money in other ways to establish a savings plan.

• Assist them in saving a portion of their earning for college, purchasing a car, receiving vocational training or other future possibilities.

Talking to Children About Money

Discussing Money ProblemsWith ChildrenImportant lessons to pursue in discussing money concerns with children include:

• Parents can turn tough times into learning situations; hard work, patience and communication are needed in such times.

• Parents and other adults should model how the family can have fun together in less expensive ways.

• Increase family communication and solidarity and help children feel some control in their lives.

Talking to Children About Money

Discussing Money ProblemsWith Children

Other key lessons during tough times include:

• Plan regular discussion of financial issues as appropriate and provide reassurance.

• Involve all family members in making some money decisions (how to limit spending, etc.).

• Assist children in becoming wise consumers and disciplining their spending habits.

• Encourage children to contribute in ways appropriate to their age.

Talking to Children About Money

Allowance, Earnings and Managing MoneyAllowance

An allowance is a small amount of money set aside regularly (for example, monthly) for a child’s use and learning. A money allowance is designed to be a tool for teaching children about positive money management.

Talking to Children About Money

Allowances and ChildrenA learning experience that gives children hands-on experience in handling money and managing it. Some guidelines include:• Help children, as soon as they are able, to differentiate

among coins and different money amounts.• Help them list their needs and wants

and rank them in importance; cover needs first.

Allowance, Earnings and Managing Money

Talking to Children About Money

Allowances and Children• Set guidelines for using allowances, such as saving 50

percent and using 50 percent for spending or other priorities.

• Parents may feel they cannot “afford” an allowance. However, setting regular amounts can encourage saving money and financial skills.

• Explain that an allowance is not a reward or payment, but a teaching tool to gain money management experience.

Allowance, Earnings and Managing Money

Talking to Children About Money

Personal Earnings and Children• Consider what kind of work or jobs may

be suitable for young children to earn some money. School-age children? Teens?

• Teach diligence in work efforts and excellence in work standards.

• Keep child’s earnings from interfering with school and family life.

• Parents should work with children to manage any money gained through earnings responsibly.

Allowance, Earnings and Managing Money

Talking to Children About Money

Money Management Skills and Children• Set limits on what children have to spend, and make

adjustments as they grow older or their needs change.• Teach them about keeping money

records, using savings and checking accounts, and using credit.

• Be positive and encouraging with children as they ask questions, seek to develop financial knowledge and skills, and learn the techniques of managing money with adult guidance.

Allowance, Earnings and Managing Money

Talking to Children About Money

Key Points/Conclusion• Consequences of how children

learn about and manage money are vitally important for their life, happiness and future.

• Managing money well allows them to distinguish between wants and needs, learn how to save and budget, and make wise spending decisions.

• Parents, caregivers and other adults have a substantial responsibility to provide children with a good model of money management.

Talking to Children About Money

Other Extension Resources on Children and Money• University of Nevada

www.unce.unr.edu/programs/sites/moneybookshelf/• University of Florida

http://hillsboroughfcs.ifas.ufl.edu/FamilyPubsA-Z/money.pdf• Quick Blurbs for News and Radio

http://extension.missouri.edu/ceupdate/kidsmoney.html• University of Minnesota

www.extension.umn.edu/distribution/youthdevelopment/DA6117.html• Iowa State University

www.extension.iastate.edu/Publications/PM1776.pdf

• University of Illinois Extension https://pubsplus.uiuc.edu/browsedollars.html

• Thrive by Fivewww.creditunion.coop/pre_k/index.html

• Financial Security for All Community of Practice on eXtension.orgwww.extension.org/pages/Financial_Security:_Children_and_Money

Talking to Children About Money

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