While your little one might not need to know how to balance a check book quite yet, you can start to teach her about money management with chores. School-aged kids are developmentally ready for the responsibility of simple household tasks. Instead of just handing out an allowance for doing nothing, set up a payment plan for these tasks, using chores as a valuable tool to help your child understand the value of a dollar.
As your child grows and develops, teaching her to take on new responsibilities quickly becomes part of parenting. Taking on household tasks has a multi-fold purpose -- helping your little learner to understand that she is part of the family unit, showing her that responsibility is a necessary part of getting older and helping her to understand how money works. Instead of always doing everything around the house yourself, share the responsibility with your child and show her how hard work is rewarded.
If you're hopeful that you can farm out the most dreaded toilet scrubbing task to your first grader, think again. While chores can help your child to understand the importance of earning and managing money, making the tasks age-appropriate is the key to success. Start from a realistic approach that meets your child's developmental level. As your child grows, her chores can become more complex. Expect that your 6-year-old can fold and put away laundry, your 10-year-old can dust the living room and your 12-year-old can help out with the dishes. Never allow your child to use any type of chemical cleaner, heated cleaning device (such as a steam mop) or clean mold or bacteria-filled areas.
Using a reasonable pay scale for chores can help to further money management concepts. Consider what the chore is worth, how hard your child works towards accomplishing the chore and the length of time that it takes. Dusting the coffee table isn't worth the same amount of money that hand washing an entire sink of dirty dishes is. If your child slacks off or does a half-hearted job, dock her pay. This will help her to understand that there is a difference between earning money and you just giving it to her.
After the chores are done comes the spending. Have a conversation with your child about how to manage the money that she is earning in terms of appropriate spending habits. Ask her to think about how much work she did to earn her five or 10 dollars before she quickly spends it on something frivolous. This conversation should also include saving money. Talk about why she might want to save money and how to do it. Suggest that she put her money in a piggy bank or even the real bank to keep it safe.