Kids at this age can understand that you have to earn money: “Mom and Dad go to work to earn money so that we can buy you groceries and clothes.”

You can also teach them the difference between needs and wants, how to use debit and credit cards and online banking, keep track of spending and saving, and the meaning of lending and borrowing.

• You may also want to talk to kids about advertisements and how they try to target kids. Talk kids through how just because they see a product online or on TV doesn’t mean that the product is a good product.
• Kids who get an allowance or earn money when they do chores or rake leaves for a neighbor, kids get a sense of how much they can earn related to the amount of work they do.
• At this age, you can also start to introduce compounding. You can introduce this complicated concept by having your children put their own money in a clear jar and you can add money to show them how money grows when they invest it (and don’t spend it).

Kids at this age understand that they can spend their money and now’s the time to start developing healthy decisions. They may need help to determine how to save and how to spend (and to save up for things they really want).

• A spending jar
• A savings jar for long-term savings goals (like a bike or iPad)
• A giving jar for charitable giving

Until now, children tend to learn about money by watching what you do with it. You can easily start to get kids more involved in money conversations at this age.

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