Money Education for Six to Seven Year Olds

Television and the magic of persuasion becomes an issue. It is a good time to talk with your children about advertising versus what an item can really do. Also, it is a good time to introduce the allowance and savings strategies.

For savings, give your child three banks (jars) labeled with the following: Spending, Saving, and Sharing. This will start them thinking about planning and spending their money. You can even tape a picture to the jar of something specific they are saving for such as a truck or Barbie doll.

Since most children will get money out of their parents anyhow, now is a good age to introduce an allowance. Start with a $1 or so given every week. Show that a $1 is equal to ten dimes or four quarters. Some parents give money equal to the child's age and others use half of the child's age. Be consistent and pay at the same time every week. At this age, the amount should be weekly. Keep the amount reasonable, too. Overdoing it gives the impression that things come easy and under-doing it gives the impression that things come too hard. Clearly explain what they are expected to pay for with their allowance money. What you expect them to pay for out of their allowance will ultimately affect the amount given.

There are two schools of thought on allowances: payment for work performed or payment unconditionally.

The first approach, payment for work, can be a source of conflict and power struggles. The child may say: 'I am not making my bed anymore because I don't want an allowance.' Plus, this method may undercut the moral concept that the family is a unit where each member contributes and works.

The second approach, payment unconditionally, is recommended by most psychologists. The allowance is used a money management tool, no strings attached. All family members are expected to do their share of work around the house - not tied to an allowance. Chores must be done as a part of family responsibilities.

You may also want to consider a combination of an unconditional allowance plus extra earnings for extra chores. This starts to give them the message that when we work, we earn.

Activities to encourage at this age include playing grocery store or fast food restaurant where a child can learn to make change.

 

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