How to Teach Pre Teens Money Lessons

Ten to twelve year olds begin wanting more “things” to be like their friends. While this may be true even at a younger age, it becomes more prominent during pre-teen years. Therefore, money lessons are in order to teach them that money does not “grow on trees” and that it must be earned, as well as saved and used wisely.

Various family have different methods that serve the same purposes. Envelopes labelled, for example, “Savings,” “Entertainment,” “Clothing,” “College,” “Charity,” and “Gifts” would be a wise start. Whether the child earns a weekly allowance, babysits, has a paper route or has some other means of earning, discuss the reasons why money needs to be allocated to various breakdowns. Perhaps you are willing to spend sixty dollars on sneakers but the ones your child wants cost over a hundred dollars, so explain they must come up with the difference. Through your discussion of budgeting, showing how you handle yours may serve to further demonstrate that this is not a punishment nor are you being unfair. This is reality. Certainly your child doesn’t need to know the dollar amounts you spend on each breakdown, but simply the fact that you allocate money to different needs.

Open a bank account with your child in their name and have them make the deposits so they can experience the handling of their own funds. This also demonstrates a grown-up privilege. By receiving a monthly statement, they will see their money accumulate. This is the time for a discussion concerning why one needs to have a saving account that is strictly for savings and should not be dipped into. If you can find an article or story in the media that proves your points, all the better.

Putting money aside for charity may be the one allocation for which you may receive some flack. There are a myriad of causes. Whether it is your church, research organization for a family illness, local food bank or some other cause that hits home with your pre-teen, suggest that the charity be labeled as such so they will know what they are saving it for. What is the goal your child wants to reach before turning it over to the organization? Explain that at that point, they may continue collecting for the same charity or for another one. Certainly if there was a charity that helped a member of your family or somebody your child knows, by pointing out the way that charity served the person or family’s need helps to reinforce the reason for contributing toward that charity.

Any time that there is an example that arises in life or media of financial values that you are attempting to teach, share them. When you do so, by presenting it in a way that makes your child feel important and valued will go a long way. “See how your saving for the Red Cross will help those who lost their homes in tornadoes.” Any cause that is closer to your home and one for which your child can relate would be a perfect example to use.

Be prepared for the argument that other kids walk around flashing big bills in school. Such topics as, “Is that a wise move? Why or why not?” or “How would you feel if you wasted your money on candy or games and then couldn’t get the sneakers you wanted?” Young people at these ages do not think ahead. Parents and guardians should mould their thinking concerning handling money. This includes the topic of how much money the young person should carry around in their pockets. “What is the wise amount to have in case you need it for something?” In years past, parents used to say that you should always keep a dime, then a quarter when the cost went up, to make a telephone call if there was an emergency or ride needed. Keep in mind that today, so many young people carry cell phones that they can make a easily make a call, even if they don’t personally have a cell phone. 

These discussion and habits begun during pre-teens will carry over into teen years when challenges are bigger, as are the costs of items. Having already moulded their thinking and habits will make the transition toward paying rent (for those living at home after high school) and contributing toward satisfying their increased appetites go much smoother.