Ages and Stages of Money Management

Ages 8 to 12

Help your child open a small 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. Your child should start using allowance money to pay for certain unnecessary or expensive items he or she insists on having – from baseball cards to designer clothes. Your child also can earn extra money doing extra chores around the house, such as yard work. Involve your child in family discussions about money. Have him or her help you mail bill payments and charitable donations, scan the newspaper for sales, etc. Encourage your child to make or buy affordable gifts for loved ones and to give time or money to charitable causes.

Ages 13 to 17

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. Perhaps the best way to start is with odd jobs for friends and neighbors (babysitting, lawn mowing) as opposed to working for an actual business. For younger teens, an hour or two during the school week is enough to give a sense of accomplishment and responsibility (plus income). For older teens, 10 hours a week should be the maximum. Your child’s allowance money and income from odd jobs can be used to pay for more of his or her non-essential expenses (dates, movies, concert tickets, gas money). The emphasis should be on learning about the working world and responsibility, not making thousands of dollars a year in outside income. Summer jobs also offer income and educational opportunities. Encourage your child to put more money into savings and investments, to learn more about finances and consumer rights, and to participate in school investment clubs or other finance-oriented activities with friends. If your child is college-bound, make sure he or she understands the importance of “spending within your means,” being careful with borrowed money, and the need to continue saving and investing. Continue encouraging him or her to give time and money to charity and to make or buy gifts for loved ones.