Forbes has a great article on money lessons you should be teaching your kids, with milestones for ages 5, 10, and 15. Let’s see how I’m doing with my kids:
Money Lesson Goals for 5 Year Olds
- Savings Goal – a savings goal has three elements: (1) what you want to buy, (2) when you want to buy it and (3) how much it will cost at that time.
- Bank – a place that helps us safely store, organize and manage our money
- Check – a way to pay for items where we write a note asking our bank to send our money to someone to pay for our purchases
- Bills – notes letting us know how much we owe for our purchases
- Trade Off – A decision we have to make when we are considering whether to save for something or spend our money
I believe that we set up savings accounts for the kids by the time they were 5 years old. If not, it was pretty close.
Grasshopper and Sensei, age 16: Money always burned a hole in her pocket, so I had to implement a 100% match for her savings account, with the caveat that what goes into her savings account stays there until college.
PickyKidPix, age 14: She wanted a checking account at an early age and I told her a white lie — that you had to have $2000 in your savings account to get one. She then worked hard to save up $2000 but I still didn’t get her a checking account as I thought it was only for adults. This is not true though, my husband told me. Minors can get checking accounts with a parent.
My son, age 11: My son is the least materialistic. His impulse purchases are primarily sugary drinks, candy, and gaming apps/videos. Even with his gaming, he usually uses the free apps and he’s pretty particular about his gaming videos so he mostly gets them for his birthday — pre-ordered that won’t arrive for six months. What he needs to learn is not to give away his money though. His sister, PickyKidPix, will charge him for entering her room and he will willingly hand over $10 for this privilege.
Money Lesson Goals for 10 Year Olds
- Interest – money you are paid for lending your money or an amount of money that is added to money you borrowed
- Loan – money that’s borrowed and is expected to be repaid, usually with added interest
- Time Horizon – the amount of time that you will save for a big purchase
- Inflation – a general increase in the price of goods and services over time
- Taxes – money that we pay to the government to help pay for public programs and necessities.
Grasshopper and Sensei, age 16: I’m not sure if she knew about inflation and taxes by the time she was 10 years old but I think that she did. At 10 years old, we focused on savings goals and not wasting money. She has a tendency to buy the same items over and over again like bags and backpacks. I wanted her to focus on buying the item she really wanted — not the least expensive — so she could be one and done.
PickyKidPix, age 14: She is the most curious about money. By age 6, we had frequent conversations about simple versus compound interest, franchise versus company owned store chains, and starting a business. But I would note that money and how it works fascinates her. She has watched Shark Tank for years and when I asked her if she wanted to be on it one day, she replied, “Yes, as a shark!”
My son, age 11: I need to go over these terms with him. I think he knows them from YouTube videos that he watches that seem to cover a wide swath of subjects.
Money Lesson Goals for 15 Year Olds
- Investing – putting money into assets (like stocks, bonds, mutual funds, etc.) to help you reach your financial goals.
- Asset Allocation – how your money is divided among asset classes such as stocks, bonds, and short-term investments
- Diversification – spreading your money amongst various types of investments within an asset class (different kinds of stocks and different kinds of bonds)
- Stock – a share of a company that is sold to the public
- Bonds – an IOU issued by the federal government, state governments, or corporations in which you earn interest, and receive your investment back at a later date
Grasshopper and Sensei, age 16: We are currently setting up a checking account for her so that she can learn to manage it including balancing it. While all my kids have a stock market account which their grandmother set up for them to start them out, only PickyKidPix tracks her stock (Disney) and actively trades stocks in her account. I need to do that with my oldest.
PickyKidPix, age 14: She started investing in the stock market and has asked me a lot about bonds. She’s tortured by the fact that her stock purchases are under water but I think that’s a very valuable stock market lesson.
Once her older sister has a checking account set up, I need to do the same with her. Her sister protests about both of them getting checking accounts at the same time. Sometimes being the oldest does come with privileges.
My son, age 11: He has very little interest in investing at the moment. All we talk about is how Mojang, the company that started Minecraft, sold in four years for over $2 billion dollars to Microsoft. That’s pretty exciting news for a future game developer which he might gravitate towards.
Summer Curriculum: Money Lessons for Kids
For a summer learning Money Lessons for Kids, I’ve rounded up some videos and posts:
Simple Versus Compound Interest
How Do Bonds Work?
What is Inflation for Kids?
For more ideas about teaching Personal Finance to Kids, check out my Pinterest board: