Here’s a quick guideline for teaching your child about money management. Earl M. Moton, president and CEO of E.M.O. Financial Services Inc., and Sheryl Ridley-Dorsey, author of Money Management for TEEN$ (Teen$ & Kidz Publishing Co.; $13), offer these tips:
Age 3 to 5: Teach your child the value of money (it is used to make purchases). Also discuss needs versus wants.
Age 6 to 9: Place a piggy bank in your child’s bedroom so he or she can see it and begin to understand the concept of saving. Incorporate money games to make learning fun; Kids.gov has a wide selection.
Age 10 to 12: Open a savings account at a bank. At this age, kids are better able to understand the return on their money. Now is also a good time to go over the basics of budgeting and buying stock.
Age 13 to 17: Emphasize responsible credit management. If you allow your teen to have a credit card, make sure it has a low balance. This will reduce the temptation to overcharge.
Age 17 and up: Encourage your child to continue developing money management skills by attending workshops and reading books.