Because children learn visually, one approach to help them know where their money will go is to set up transparent jars in their bedroom with names like "spend," "save," and "donate."
According to one research, a person's money habits are formed by the age of seven, so start talking about what things cost, how you pay off bills, and where money originates from as early as possible.
Kids learn via play as well, so one approach to involve them in the money topic is to play grocery store or restaurant using dollar store paper money.
Before you go shopping, have your child assist you in clipping coupons from your local newspaper. If you collect digital coupons, have them swipe through the selections and add item-specific vouchers to your cart.
Introduce the difference between needed and wanting while shopping with your child. Purchases needed to survive, keep well, and complete duties are called needs.
When your child's savings begin to exceed the capacity of their transparent jars, it's time to create an actual bank account so they can track their progress.
Kids will understand that things cost money at this age. How can they make money to pay for their wants and needs? That's the next thing you should do.
This is the age to start talking about opportunity costs. Discuss the worth of what your children choose not to buy. Define the term "impulse buy."
Around this age, your child will most likely express an interest in earning money, so assist them in developing an age-appropriate plan to generate cash in order to achieve a certain goal/target.