It's never too soon to teach kids about money and how to spend it. FDIC and the Jump-$tart Coalition offer these tips for parents in teaching kids of various ages and stages:
BIRTH TO AGE 7- Assign basic household chores. Even a 4-year-old can make his or her bed and pick up playthings. Have a list of "little jobs" that small hands can do to earn a dime or quarter.
- Provide a piggy bank for sav-ings and little sheets for easy record-keeping.
- Don't buy toys on demand. Help your child to look forward to birthdays and holidays for special items.
- Let your child learn about actions and consequences. Having possessions brings responsibilities, such as putting away a game to avoid losing pieces.
- Play games sorting, identifying or counting coins.
- Set up a lemonade stand or bake sale to help kids learn about money and entrepreneurship.
- Take your child along on shopping trips and explain what makes some items "too expensive" and others "good buys."
- At around age 5, start giving an allowance on a regular basis. Allow the child to pick out and pay for certain small items in the store.
- Encourage generosity by having him or her buy or make gifts for loved ones and give donations to church or charity.
AGES 8 to 12
- Allow your child to begin making more decisions on his or her own. For example, encourage comparison shopping.
- Give a specific allowance and stick to it. Let your child use the allowance for certain unnecessary or expensive items he or she insists on having - from baseball cards to designer clothes.
- Don't pay your youngsters for doing regular chores. If you do, there may come a time when he or she might refuse because money isn't needed. But do provide opportunities to earn extra money doing extra chores, such as yard work.
- Help your child open a savings account or even invest in a mutual fund or individual stock. Consider rewarding your child for good savings habits by supplementing his or her own deposits or investments.
- Involve children in family discussions about money. Have them help mail bill payments and charitable donations, scan the newspapers for sales, etc.
- Encourage your child to make or buy affordable gifts for loved ones and to give time or money to worthy causes.
THE TEEN YEARS
- Be consistent. Continue to have daily household chores. No children should be too busy to pick up after themselves and to help around the house.
- Your child can begin making money outside of the home, either after school or in the summer, provided the work doesn't interfere with schoolwork or socializing. One of the best ways to start is with odd jobs for friends and neighbors, such as baby-sitting and yard work.
- For younger teens, an hour or two during the school week is enough to give a sense of accomplishment and responsibility. For older teens, 10 hours a week should be the maximum. This money can be used for nonessential expenses such as dates, movies, gas money.
- Make sure your child understands the importance of "spending within your means," being careful with borrowed money and the need to continue saving and investing.
- Continue to encourage to share and donate time and money to good causes and for gifts for friends and loved ones.