Around age four, children can often count ten or more objects and identify everyday items in the home, including money. As your child is approaching or has achieved these cognitive milestones, there are ways you can help them learn more about money.
While you may have engaged in pretend play, like playing store or restaurant with your toddler, you likely weren’t expecting them to count out bills and coins. Many toddlers are just learning to count, but as they grow older, the focus can shift to understanding the actual value of money and how all bills and coins are different.
One way to begin teaching your child about money is to focus on coins since they all vary in size. You can use a book, make flashcards, or show them real coins to introduce your child to the concept of pennies, nickels, dimes, and quarters. Help them understand how they add up – five pennies make a nickel, and so on.
If your child has a piggy bank, give them a pile of spare change and help them sort it by type of coin. Encourage them to count how many of each kind they have as they put the coins into the bank.
As your child is learning about the different types of bills and coins, it’s a good time to teach them about the value of money. They may already understand that we use money to buy things we want and need, but now you can show them how some things cost or are worth more than others.
You can do this simply by engaging your child at the store. Use items on the shelves as examples to show them how much you can buy with $1, $5, or $10.
If your child does chores around the house to earn money, this could also be a good age to start assigning unique values to different tasks. The more challenging or time-consuming a task, the higher the value should be. Make sure your child understands this concept and provide a visual learning tool by printing out or using real money to designate how much a chore is worth.
When they get paid for their chores, help them sort the money by bill and coin type and count how much they have earned. Then show them how to deposit it in their savings account.
Children under the age of 13 can have a custodial account. Parents, guardians, or other family members may also open a custodial account for a minor. While the custodian can make deposits and withdrawals, the account ultimately belongs to the minor. Custodial accounts can remain open until the child reaches the age of 21, after which they will need to transition to a Regular savings account.
We currently offer a special higher-yield dividend rate for accounts opened for or owned by those under 18. There are no monthly fees on a custodial or regular account; however, a $5 minimum balance is required to maintain your account.