I have previously written about being an effective role model for your children: save a portion of every paycheck, maintain an emergency reserve, budget wisely and talk openly with your children about money. Last but not least, encourage their development of good math skills while they are in school.

So what else can you do? Beth Koblinger, a bestselling author and a member of the President’s Advisory Council Capability, was instrumental in the creation of Money as You Grow:20 Things Kids Need to Know to Live Financially Smart Lives. You can find it online for free.

Kobliner breaks down money concepts that children can learn by age. Note the emphasis in bold for each point. While all points are valuable, I’ll expand upon one concept for each age.

Age 3 to 5 Years

• You need money to buy things.
• You earn money by
• There’s a difference between the things you want and the things you need.
• You may have to wait before you can buy

A terrific idea is to label three jars, “Spending”, “Sharing” and “Savings”. Every time your child receives money divide it equally between the jars. The spending jar is for small purchases such as a cookie or colored markers. The money in the sharing jar can go to a favorite cause or a friend/neighbor in need. Lastly, if your child has a goal of buying a more expensive item, they may have to build up the savings jar to be able to purchase it. This teaches goal setting and patience.

Counting the money together as new contributions are made teaches about the value of each coin and paper dollar and also helps set expectations as to when they will reach their goal.

Ages 6 to 10 Years

• It’s good to shop around and compare prices before you buy.
• It can be dangerous to share information
• Putting your money in a savings account will protect it and pay interest.
• You need to make choices about how to spend your money.

We all make choices every time we shop… is it the store brand crushed tomatoes or the name brand which is $.20 more? Is it a new dress in a department store or are you going to shop at your favorite consignment store? Is it a new car or a used car?

As you shop with your child, discuss how and why you are making your decisions. “Do we need this now, or can we wait six months”? “Can we find this to be less expensive elsewhere”? It provides then with an understanding that there are tradeoffs and options.

Next time, we’ll look at ages 11 to 18+!