Basic Money Skills Your Child Should Have by Age 10

Father talking to son.
Father and son | Source: iStock

Financial Literacy Month is not only a time to evaluate your financial skills but also the financial skills of your child. There are certain milestones your child should reach by the time he or she is 10 years old. “In a world where financial security is uncertain at best, ignorance is not bliss. So however much trepidation we may feel about money—we don’t know enough about it, there’s something wrong with knowing too much about it, kids should preserve their innocence as long as possible—we cannot allow these feelings to cause us to pass financial ignorance on to another generation of kids,” said Neale S. Godfrey, CEO and president of GreenStreet Commons. Here are some of the financial lessons your child should learn by the age of 10.

The ability to differentiate needs from wants

Young children often have trouble telling the difference between a true want and a true need. Everything seems like a need to children. It will be important to teach them to delay gratification so that they can devote their financial resources to what is absolutely important, like saving for a rainy day. “When trying to teach your children about needs versus wants, consider pointing out items like food and clothing as you shop and ask them to tell you which category each fits in to,” said the Consumer Financial Protection Bureau. “Understanding the difference between needs and wants is a bedrock concept that can lead to a lifetime of better financial decision making. Needs include the basic things we need to survive – food, clothing, and shelter.”

The value of saving money

If you give your child an allowance, this is the perfect opportunity to teach him or her about setting aside some cash for savings. When your child is younger, buy a piggy bank and add coins and birthday money. Between the ages of 3 and 5, your child should understand that it takes money to purchase things. As your child gets older, set up a kid’s bank account and teach the basics of banking. Several banks such as Bank of America, CapitalOne 360, and Wells Fargo have special bank accounts just for kids.

The basics of investing

Man holding piggy bank | Source: iStock
Piggy bank | Source: iStock

Once your child reaches 10, they should understand what a stock is and how to go about purchasing one. You can aid the learning process by exposing your child to games about stocks to make it fun. The Stock Market Game is one tool to consider. This game allows users to test their skills by investing with virtual cash. “While minors can’t own stocks or open brokerage accounts in their own names, parents can set up custodial accounts under the Uniform Gifts to Minors Act or Uniform Transfer to Minors Act, depending on state laws. You simply complete a form with the child’s name and Social Security number and the name of the custodian,” said 360 Degrees of Financial Literacy.

The dangers of online scams

By the age of 10, your youngster should have an understanding of the dangers of sharing personal financial information on the internet, such as credit card and bank account numbers. Websites such as and Net Cetera can give you tips for keeping your child safe online.
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