What should children know about money by the time they are 7 years old?

Children as young as three years old can grasp financial concepts like saving and spending. A report by researchers at the University of Cambridge commissioned by the United Kingdom’s Money Advice Service revealed that kids’ money habits are formed by age 7.

So what should children really know about money by the time they are 7 years old

The United States Consumer Financial Protection Bureau insists that for preschool and kindergarten the Money lessons should be fairly basic.

You need money to buy things.

Have your children identify coins and their value.
Identify items that cost money, such as ice cream, gas for the car, or clothes.

You earn money by working.

Describe your job to your children, or take a walk around your neighborhood or town and point out people working, like the bus driver or police officer.
Explain that some people start their own businesses, like stores or restaurants, and those people are called entrepreneurs.
Encourage your children to think about how they could earn money by setting up lemonade or cookie stands.

Delayed gratification: You may have to wait before you can buy something you want.

When your children are standing in line for a turn on the swings, or looking forward to their favorite holidays, point out that sometimes we have to wait for things we want.
Find three jars (or cans) and label one for saving, one for spending, and one for charity.
Suggest that your children put some of the money they get into the saving jar, so they can buy a toy or treat when they have saved enough.

The  difference between things you want and things you need.

When you are out shopping, point out essentials such as food and clothing, and ask your child to describe items that she may want but are optional.
Talk about how your family decides what to buy and what to pass up. Which is more important, buying fresh fruit or cookies, milk or soda?
Draw a circle and divide it into sections for food, rent or house payments, clothes, and “optional items,” to show that there is a finite amount of money to spend.
Starting at the age of 7, children can start learning about investing shares and charity, planning for the future, banks and savings, record keeping, credit and debit cards…etc. read more.

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