Children can start at a young age to understand money and to progress toward learning how to plan for earning, spending and saving money. The Jump-start Coalition for Personal Finance Literacy recommends National Standards for school-aged children by grade level. Children can learn simple accounting--like simply tracking their spending--and progress to more advanced accounting activities like budgeting and record keeping. Accounting activities are often part of the school curriculum but can also be reinforced at home.
Teach Children About Money
Accounting centers around money. Teach younger children how to recognize coins and bills with flash cards, toy money or real money. Progress with money knowledge and easy accounting with the concepts of earning and spending. Play money games like Monopoly or The Game of Life. Turn an area of the house or a classroom into a store with merchandise, a cash register and calculators for playtime with a purpose. As children advance in their understanding of money, have them keep simple records of earnings, expenses and profits.
Video of the Day
Teach Children to Budget
A budget is an important part of accounting. Show children a made-up budget if you are teaching a class, or show your own child the family budget. Compare salaries to monthly bills. Help children write up a budget of their own. Include income and expected expenditures, as well as savings goals. Continue the activity by having children keep a record of their income and expenditures each day for one week or longer. Explain that tracking where money comes from and where it goes is an accounting procedure that all businesses must do and is a common way for adults to keep track of family finances as well.
Teach Children About Checking Accounts
Check writing is a frequent activity for businesses and families alike. Therefore, any business or individual with a checking account must also learn the accounting techniques and record keeping involved with a checking account. They also need to understand reconciling the checkbook with the bank statement each month. Start with teaching children how to write a check. Print some pretend checks (see the Resources section) or design your own. Copy some generic deposit slips without account numbers that are available at your local bank. Also, obtain a monthly bank statement sample and a check register from a bank or make up your own. Have the children practice using all the documents.
Teach Children About Debit and Credit
Help children learn about business debit and credit accounting. Give each child a copy of a page with a T shape taking up most of the page. Write above the left side of the bar, "DEBIT--Money In" and above the right side of the bar, "CREDIT--Money Out." Explain that a debit is adding money to the business, and credit is taking money out. Create some scenarios where the class earns money, which would be a debit to the classroom business, and some situations where the class would have to pay money for something to create a credit. Have them record the amounts in the correct column and add the columns to determine how much money was taken in and how much was paid out.