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There is a lot of advice available for teaching kids about money. But the one thing all the experts agree upon is that any discussions or lessons about money should be age-appropriate and shouldn’t occur too early. Most children will begin asking questions around age five. That is the perfect way to start the conversation.

At these ages, you can role play with your children, by playing store or bank. You can also ask your kids to help you clip coupons and explain how they help you save money. Below are some age-specific suggestions.

Ages 5-9: Teach the basics

It’s important to remember that younger children think in very concrete terms. For example, if you offered a young child a dime and a nickel, he would likely choose a nickel because it’s bigger, in spite of its lesser value. So, when talking about money, use examples they can understand, or even touch.

Chores

Assigning a young child chores teaches them that money isn’t free – you have to work to acquire it. This will also instill a sense of responsibility and work ethic.

Allowance

Give your child an allowance upon completion of their chores. Explain that they can spend the money, or save it. Comparing their piggy bank to your bank account will provide a concrete example of what they can do with their money, using something that is familiar to them. Explain that they can use their allowance to buy something small now or save more of their allowance and purchase something bigger later.

Be honest.

If your child wants an expensive toy, and it’s not in the budget, explain why. Tell them that your bank account only has so much money in it, just like their piggy bank. Most of that money has to go towards paying for food, housing, and other essentials. Video games or toys aren’t essentials, so you can’t purchase them right now.

 Ages 10-13: More responsibility and “real-world” skills

Children at this age are ready for a little more responsibility and can learn basic skills about banking and economic choices.

Open a Savings Account

By opening a savings account with your child, you can teach them basic banking skills: using a ledger to record transactions, completing deposit and withdrawal slips, and keep records.

Offer Extra Chores to Earn Extra Money

As kids get older, their toys can get more expensive. If your child wants something extra, offer them extra chores so they can earn extra money. You can also raise their allowance if they are consistently asking for money. Explain that their chores will need to increase in order to cover their increased spending.

Discuss The Cost of Items

Children at this age can understand simple facts about saving money and economic decisions. Talk to them about the difference between buying brand-name items and generic items. You can also explain how garage sales work, which will help them understand about the value of items, making decisions, and deciding what items are worth to them.