How Preteens Can Learn About Money

  • Savings, Social Media, Gen Z, Students
  • September 17, 2020
  • FCU Team

When it comes to teaching practical money skills, students of different ages need different methods. 3rd to 6th graders might be ready to learn the fundamentals of finance using games, books, and real world experience. At this age, you can expose your children to basic concepts like savings and deposits, as well as more advanced subjects like cash transactions and business principles. Learn more with these three tips that will get you on your way to teaching your children about money!

All for One and One for All

It's very likely your child already has some money in their possession. Whether this be through gifts from family members during birthdays and holidays or perhaps an allowance, finding ways to reinforce the value of money is key. Trading money for services or products is what gives money its power, so finding out what your child might be interested in and letting them choose what to do with their money can go a long way in giving them some independence while learning about monetary value. This can be anything from a book to a toy or video game.

Bigger ticket items like a video game console or a trip to Disney can be unreachable goals for a child. To help your child understand while teaching them, you can enter into a partnership with them where, contingent on their contribution of a certain amount, you'll cover the rest. Remember to keep this amount low so it's actually reachable!

Through this method, your child will feel as if they are contributing, learning about spending money and getting a great reward as a result! A part of the entire exercise can also include your child doing chores around the house, with money being placed towards the goal as the incentive. 

Introduce Games And Activities

Most kids don’t mind learning if the method is as interesting as it is stimulating. Whether at school or at home, when teaching your child about money, it’s important to incorporate fun elements to make learning feel less structured and more like playing. Board games can be a very useful tool for your kids to learn about money and business.

Classic games like Monopoly, The Game of Life, and Pay Day are perfect ways to pick up these skills in a fun, competitive environment. In Monopoly, players receive income, buy property, and collect rent. Kids can learn how to complete transactions by playing as well as managing their money in order to avoid bankruptcy. Everyone remembers the first time they went bankrupt in Monopoly, and it's a painful but important lesson!

In the game Pay Day, players try to grow their bank accounts over the course of a month. Players roll a die and advance the corresponding amount of days on the board, and each day has a different action. Some days, players draw “Mail” cards, which incur penalties such as bills, debt or taxes, and other days players draw “Deal” cards, which earn them cash. Players buy and sell different items over the course of the game, and in doing so learn how to collect money and how various expenses can impact their budget. At the end of the game, after three trips around the board, the player with the most money wins.

In The Game of Life, players navigate the path from college to retirement, earning, saving, and spending money as the game progresses. While the dollar values are large, the game is based on knowing when to save money versus when to cash in, weighing short-term and long-term gains while also going from the milestones of life.

Institute a weekly game night, play a few of these, and you'll find you and your child are having fun while learning about money in theoretical ways. With any luck, they'll have some questions of their own which you can answer and bring those lessons into a more realistic setting! Hopefully the die rolls go your way!

Budgeting for kids' first business!

Starting a Business 

A child in grade school doesn't need to own a Fortune 500 company to have a basic understanding of what running a business might be like! If your children receive an allowance, encourage them to invest that money in their own business. It’s a great, fun way for kids to learn about business and money management.

Help them figure out what kind of business they want. Starting a weekend lemonade stand on the sidewalk or at the park is a fun way to make friends and engage with others, as well as a great way to learn practical money skills by conducting real business transactions. Some other ideas for businesses that kids can run themselves include a neighborhood dog-walking service, a car wash, or selling homemade items like cookies or T-shirts. For a full list of ideas, click here to see what else they can do.

You can help or monitor your child, and if they’re a little older, let them navigate the process freely themselves. If your child is setting up in a public place, set up a time and location for them to be dropped off (“Open”) and picked up (“Closed”), or stay to monitor the business and make sure they aren’t violating any local laws and statutes by making cash transactions. Click here to learn how to get a permit for a lemonade stand and similar businesses.

Read Books

Reading is one of the most effective ways for children to learn, as they can read about saving money and how a business operates from examples in the stories they read.

From Judith Viorst, the author of Alexander and the Terrible, Horrible, No Good, Very Bad Day comes another entry in the series titled Alexander, Who Used to Be Rich Last Sunday. In this book, Alexander has difficulty with money and impulse purchases, as he spends all his cash as soon as he gets it. Kids can learn the importance of saving through Alexander’s struggles.

Another great story is called The Lemonade War by Jacqueline Davies. This story is about competing siblings, each running their own lemonade stand and trying to best the other. The older brother, Evan, struggles with math and managing his money while the younger sister, Jessie, is brilliant but has issues with people skills. This book teaches kids basics about business, family, and embracing what makes people unique.

Other books your child might find interesting include Amelia Bedelia Means Business, The Mighty Miss Malone, and Rock, Brock, and the Savings Shock. View an expanded list of books for kids covering the topics of money and savings.

You Know Your Child Best

At this age, it is very important to lay the foundation of your child’s understanding of money. However you decide to teach your child, remember to keep learning fun and light in order to keep their interest! At the end of the day, you know your child best and what combination of methods might work best for them, so get to teaching and having fun! Think your child is ready for some extra responsibility? Consider looking into our Youth Savings account option.

This blog is the second in a three part series on youth financial literacy. Articles also include information for young kids and high schoolers. To learn more about teaching your preschooler money basics, visit our last blog article here.

Florida Credit Union is a full-service financial institution. Founded in 1954 as the Alachua County Teachers’ Credit Union, FCU now services over 111,000 members in 45 countries throughout North and Central Florida. For more information on the services we provide, visit FLCU.org or call us at 1-800-284-1144.