Money management for 8-to-12-year-olds

Learn some practical money management skills specifically for youth ages 8 to 12 years old.

Youth become so excited when they get any type of money in their hands. With having their own money, they get to decide how to spend it. However, this also provides a great opportunity to learn about good money management principles. According to Practical Money Skills for Life, there are guidelines for money management skills for all age groups. In this article, an overview will be given for youth ages 8 to 12 years old.

Whether kids get a weekly allowance, gift cards or birthday cash, they should start thinking of money goals. What will they spend it on? It could be short-term, which allows them to purchase something right away, or long-term, which might be a bike or clothing or something that costs a little bit more than they have at the moment. Having short-term and long-term goals and having a plan to reach both is an important life skill.

Whether saving for a game or bike, movie or shoes, decision-making and goal setting are lifelong skills that can be taught at an early age and should continually be discussed. A poor decision could leave the youth with no money to spend with the naturally consequence being that they are not able to go to the movie or get that game. This is a safe space for that consequence versus having this same experience as an adult being unable to pay bills.

At this age, a discussion on budgets can be started. Parents can share their budgets and show the youth what they spend their money on to give them an idea that monthly bills need to be paid. This can also be done with yearly taxes or the car license renewal to show there are annual financial commitments as well.

Once the child gets their own money, they can set up a personal budget with a percentage going to savings, college (it is not too soon to think about this), cash on hand and charity. Look at the budget like a pizza. As the pizza is sliced, youth can make the decision on how much goes in each slice. The key to saving is to get in the habit of doing it regularly. Start early and often, and 8 to 12 years old is a great time to start.

Everyone wants to have plenty of money and be able to spend it, but there are many resources available to help parents and youth succeed in learning about saving, spending, budgets and how to improve their to money management skills.

Michigan State University Extension and Michigan 4-H Youth Development help to prepare young people for successful futures. As a result of career exploration and workforce preparation activities, thousands of Michigan youth are better equipped to make important decisions about their professional future, ready to contribute to the workforce and able to take fiscal responsibility in their personal lives. To learn about the positive impact of Michigan 4-H youth career preparation, money management, and entrepreneurship programs, read the 2016 Impact Report: “Preparing Michigan Youth for Future Careers and Employment.”

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