Why is taking advantage of everyday "teachable money moments" such an effective way to teach young children about money?

• Very few topics affect us on a day-to-day basis like money, so there are endless opportunities to provide mini money lessons to your children throughout the day.
  
• By taking advantage of these everyday “teachable money moments”, you’re creating an ongoing dialogue with your child that will help instill important and positive financial values and attitudes.
  
• These everyday money lessons will be a foundation to ensure that they have a lifetime of good financial habits and attitudes.
  
• As soon as the opportunity arises, and you think your children can understand and express an interest, they should be taught the value of money and how to respect it.

Specific examples of common opportunities to teach children about money:

• Allowances: Sit down with your child and encourage them to identify ways for them to earn money through work (e.g., put away their toys, make their bed, etc.) – help them make a list and keep a chart of all the chores they complete (chores should be appropriate for age).  The lesson is that money does not grow on trees – there is a value to money – it is earned through hard work.
  
• Shopping: Make a grocery list and get kids to cut and organize coupons with you – then go to the store, and have them match the coupons with the items on the shelves – talk to them about a “brand” item vs. generic – as a reward, give them some or all of the money saved from using coupons.  Teach them about the importance of comparison shopping and waiting for items to go on sale.  Teach them about the importance of wants (e.g., chocolate chips cookies and latest “fun” cereal) vs. needs (food staple products like milk, eggs, bread, etc.)
  
• Celebrate saving: Discuss with your kids an appropriate and safe place to keep their money (e.g., piggy bank, plastic container, wallet, etc.).  Put a picture of the item for which they are saving on the “bank” to reinforce visually.  Track the child’s progress with a colorful chart that can be posted on the refrigerator or bedroom door as a reminder of the child’s achievement.  Give them recognition for their discipline when the savings goal is reached – consider matching the amount if the goal is achieved within a certain time limit.
  
• Going out to eat: Compare menu items and prices (e.g., ordering water vs. soft drink).  Show them the bill at the end of the meal, talk about tips and taxes.  The lesson is about double-checking to make sure you know where you money is going and that the bill is correct, and that there is no such thing as a “free meal.”
  
• Withdrawing money from the ATM: Teach them about the “invisible money” at ATMS and how it really works – it isn’t free – you had to earn it and save it (e.g., how it is connected to a bank).  Take this opportunity to take a tour of a bank or credit union (include a visit to the vault and your safe deposit box if possible) – explain how a bank works.

Preschool Years (2-5)

• You can start teaching kids about money as soon as they express a curiosity or interest about the topic.
  
• Even a two-year old can be taught to put coins into a piggy bank.  They may not completely understand the concept of saving, but this is a good introduction to what coins look like and the idea of putting the coins into a piggy bank.
  
• Start with the basics such as money identification with preschoolers.  Teach them to tell the difference between a penny, nickel, and a dime.
  
• Show them a $1 bill and start showing them how you use these dollar bills to purchase items.
  
• When a child asks for something in a store, explain that you have to pay for item – it is not free.
  
• At this age, you could even introduce the concept of “needs vs. wants.”  Instilling good money values can begin very early.

8-12 year-olds

• Kids will be more influenced by their peers at this age.  They may be more aware of high-priced sneakers or jeans, and be more vocal in wanting these items.
  
• This is the perfect opportunity to help your kids write down some financial goals if they want to purchase a big-ticket item such as video equipment or designer clothes, and you can use this experience to focus on the act of saving.
  
• This may be a good time to show them the meaning of compound interest – get them excited about how fast their money can grow if they start putting some away today.  Impress them either with numbers or a growth chart that visually shows them how much money they can accrue in a short time period.
  
• Have family meetings to talk about family finances (e.g., paying for the house, food, gas, vacations, etc.).
  
• Introduce lessons to make money (e.g., bake sale, lemonade sale, etc.).  This may be the making of a young entrepreneur!

Teenagers

• Encourage their interest in reading the newspaper (money/business section) or watching a program on one of the business channels.
  
• Introduce the concept of a job/working if they have time from their schooling (e.g., chores, mowing lawn for neighbors, to getting a part-time job after school).
  
• Introduce them to financial terms such as the stock market, IRAs, investing, etc.
  
• If you follow the stock market, teach them how to read a stock page.  Help them follow news about companies that they like or recognize.  Share with them how a business runs.
  
• Talk to them about what is entailed in paying for college.
  
• Teach them how to use a savings account; how to fill out a checkbook; how to responsibly use a credit card.
  
• Start preparing them to live on their own in college/leaving the nest (e.g., budgeting, getting a job, not going into debt, responsibly using a credit card, living with roommates, etc.).
  
• Parents can set an example by the way they handle money.
  
• For example, when kids are young, you do not have to buy them designer label outfits that are over-priced.
  
• Even if you have money at your disposable, do not send the message that the most expensive item is necessarily the best item or that it will buy them happiness.  Your kids will not notice the label on the back of their shirt.
  
• Considering rewarding your children for their savings efforts by providing some kind of incentive program.  You can match all or part of your kids’ savings.
  
• Talk openly about money with your children.  Encourage them to ask questions.
  
• Children learn directly from watching their parents.  Parents must walk-the-talk when it comes to managing their finances if they expect their kids to understand and appreciate the value of money, saving, and preparing for their financial future.
  
• Or, even consider taking a class on financial planning at your local community college or some other community venue that offers courses.
  
• Or, consider hiring a financial planner if you are in a position to do so and feel that they are in a position to really help you manage your money (do your research).

Tips for grandparents – ways to contribute to your grandchildren’s financial well-being:

• Introduce the concept of money to your grandchildren as soon as they are able to count.
  
• Teach them the difference between needs, wants, and wishes.  Teach them to respect the value of money.
  
• When giving them, consider giving money in amounts that can be put towards savings (e.g., five $1 bills, spend $3, save $2).
  
• Consider opening a savings bank account or a money market mutual fund account in both your name and your grandchild’s.
  
• Take advantage of money “teachable moments” when you spend time with your grandchild.
  
• Set an example by being thoughtful in your own saving and spending habits – you are their role models.
  
• The Youth & Money Survey found that 72 percent of students turn to relatives besides their parents for financial information – grandparents are included in this group!