Kids and Finances (Part 1)

The holidays are a good reminder that children need to learn the value of money. Kids can be taught age-appropriate lessons at a very young age regarding money and how it is used in the 21st century.

These days, children might rarely see cash exchange hands or they might believe getting money is as easy as driving up to the ATM. Children need to be taught to be financially responsible, so they can carry that knowledge with them the rest of their lives.

The President's Advisory Council on Financial Capability (PACFC) developed a website named Money as You Grow. The site provides 20 essential, age-appropriate financial lessons and includes corresponding activities for each age. One of the main objectives of the PACFC is to find ways to improve the financial capability of younger Americans.

Some of the lessons for 3-13 year old children are provided below:

3-5 YEARS OLD

• Money is needed to buy things.
• Money is earned by working.
• It may be necessary to wait before buying something.
• There is a difference between needs and wants.

6-10 YEARS OLD

• Choices need to be made about how to spend money.
• It is good to shop around and compare prices before purchasing.
• It can be costly and dangerous to share information online.
• Putting money in a savings account will protect it and pay interest.

11-13 YEARS OLD

• Save at least a dime for every dollar received.
• Someone could steal personal information, like a bank or credit card number, if it is entered online.
• The sooner money is saved, the faster it can grow from compound interest.
• Using a credit card is like taking out a loan; if the bill is not paid in full each month, interest will be charged and the amount owed will increase.

Check back next week to learn important financial lessons for older children.

The President's Advisory Council on Financial Capability (PACFC) was created by an Executive Order that was signed on January 29, 2010. The purpose of the website is to inspire families, community organizations, nonprofits, and businesses to embrace Money as You Grow as a tool to promote financial literacy. The website serves as a guide to learning about and using Money as You Grow. It is intended for reference only, and is not meant to endorse or promote specific initiatives.