Learning the value of money can happen as young as 4, says Hollis Page Harman, financial educator and author of Money $ense for Kids! “I start out with our currency – which are bills and coins – and each one tells a story. You don’t need to know how to read.”
The sooner kids start to understand what money is, the better they will understand and respect money later, she suggests. “Now they have a relationship with it, and they’re very invested in its cosmetics, so when they then learn how to divide it up … they have a relationship that we never had with money.”
Things get a bit more complicated when using a credit or debit card or even a check, especially for some younger kids.
When children see more checks in a checkbook or several plastic credit cards in a wallet, they can easily assume that there is endless money to be spent, says Barbara Wollan, family finance program specialist at Iowa State University Extension. Parents should continually explain to their children how a check and credit or debit card work and how they carry the same value as cash.