The earlier children learn about spending, saving and earning money, the better prepared they will be to manage it on their own as an adult. Children as young as 5 years old can learn the value of money and the concept that money can be saved to buy useful things. Including children in discussions about the family budget can help them understand the concept of saving, earning and paying for goods and services.
In order to help children differentiate between coins, try a coin counting activity. Stack coins according to their worth; pennies, nickels, dimes, and quarters. Be sure children understand that different coins are worth different amounts and be sure they can differentiate between the types of coins you have displayed. Write a money amount on an index card, such as "37 cents." Using the stack of coins, the child must show you the coins that add up to 37 cents. This is a good activity for children ages six and up that are learning about coins, counting and addition.
This activity may take a few days to prepare and is appropriate for older children. Have the child scour the want ads to find a job they would like to have as an adult. Use an online search to find out how much money is earned per month for the child's desired job. Similarly, check the newspaper or an online resource for a home or apartment and transportation. Have your child draw up an imaginary budget based on his chosen career. Instruct the child to figure out how much money can he reasonably spend on housing, food and transportation expenses. Have him estimate how much money can be deposited in a savings account. Add an imaginary spouse and children to the mix and tell him to figure out whether both parents will be working and how much child care will cost. Planning an imaginary budget based on a monthly income will give the child an idea how his family handles money and bills.
Set up a pretend grocery store using pretend food and empty cardboard food boxes. Price the groceries according to their usual grocery store price. Give your child a budget close to your normal household grocery budget and a list of items they need to buy. Allow children to "shop" in your grocery store and add item prices with a calculator. See if the child can stay within the budget while still buying everything on the list. You can play this game in the grocery store with older children, too. Have children write down the prices of the items they would buy if they were the primary food shopper in the house. Add up the prices of these items and see how close to the budgeted amount your child can get.
Allow your children to browse stores and online shopping resources to find a particular item they want. Make a deal with your child that you will assign her a list of chores around the house and will pay her a certain amount of money per chore. For example, she will earn one quarter each time she takes out the garbage or feeds the dog. Draft a budget that shows how long it will take your child to earn enough money to pay for the wanted item. Use an empty coffee can or piggy bank to save the coins your child earns by doing chores. Count the money each week to see how much has been earned, as well as how much is still necessary.