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OSU Extension

College of Food, Agricultural, and Environmental Sciences

March 30, 2021 - 8:00am --

We hear about the importance of education, which starts with early literacy skills like reading and writing. Literacy can also refer to understanding and using a variety of skills, like how to manage money, which is sometimes referred to as financial literacy. Building different kinds of literacy skills in kids might be easier said than done but there are plenty of ways to get started. While we may not begin to recognize the impact of financial literacy until later in life, there’s value in teaching these skills at an early age. In fact, kids begin to understand basic money concepts around age three and have set money habits by age seven. Naturally, kids learn these concepts and habits from the adults in their lives, which is why it’s important to begin talking about these topics early! If you’re unsure of where to start, here are a few tips adapted from Utah State University Extension to build early financial literacy:

Young children ages three to six learn to recognize money, begin to understand the value of coins, comprehend immediate gratification, and begin to practice simple addition. At this age try paying coins for simple chores. Once a week have a paid chore day. For example, offer to pay a penny for each washcloth the child folds, a nickel for taking out the trash, or a dime for sweeping the floor. Pay the child right away and offer another chore. Once the child has enough money, offer to trade the coins for dollar bills. Encourage the child to save at least half of the money they make but give them the option to spend the rest of the money soon after it is earned. This helps children practice and learn early money management skills.

Early and late elementary age children begin to understand time management, can deal with larger amounts of money, and comprehend delayed gratification. At this age try having the child do a task once home from school. The task should be time-bound and have a small amount of money attached to it. For example, list chores on the outside of an envelope and place a quarter inside. If the chores are done by the time you specified, the child receives the quarter, if not, the child must still complete the chores but does not receive the quarter. On the weekend, switch it out for one dollar. For example, tell the child that if they complete their chores by noon, they can have the dollar, if not, they must still complete the chores but will not receive the dollar. Slowly increase weekend earnings up to five dollars as children progress into later elementary ages. Encourage children to keep track and save some of their earnings.

Junior high age children can begin to keep a budget, understand how to save money, and grasp the importance of donating a portion of their earnings. At this age, children may keep or increase chore assignments but consider also giving them a monthly allowance according to their age. For example, one dollar per year of age. The allowance is earned by keeping a list of expenditures and income. Give five-dollar bonuses for both proof of savings and proof of donations. Have a family meeting at the beginning of each month where children share their budgets for the previous month. Once budgets are checked, the children receive their allowance. Use this time to talk about money management and what they have learned.

High school age children can be given the opportunity to experiment with their own budgeting methods, open a checking account, make monthly donations to charity, and save as much money as possible. If you decide to continue with an allowance, have children prove they are budgeting. At this stage children can be encouraged to find their own methods of budgeting and money management that work for them.

As we end March, which is National Reading Month and begin April, which is National Financial Literacy Month, there’s no better time to help children develop a variety of early literacy skills. If you’re looking for financial tools yourself, check out what OSU Extension has to offer here.


Sara Meeks is an OSU Extension Family & Consumer Sciences Program Assistant and may be reached at 330-264-8722.

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