You know your big kid is ready to understand the concept of money if he already knows some basic mathematical skills like counting and basic operations like adding and subtracting. Aside from these skills, there are many things you can do to make him further imbibe the concept of money. Here are some of them.
Give your child opportunities to experience the use of money. Whenever you go to a bookstore or a fast food restaurant, let your child buy his own book or food. Make sure to guide him through the process before he actually goes to the cashier and pays. Brief him on how much he is going to pay and how much the change to expect. You may directly guide or prompt him during the first few times you let him buy things on his own. After he buys the item, make sure to debrief him on what he learned. Was it easy for him? Did he get confused? Compare the prices of the things he buys to other items so he gets a better idea of how to relate purchases to different items. This is also a good way to start teaching him the concept of wants and needs.
Consider giving your child an allowance to help him prioritize. Seven is a good age to introduce the concept of allowance. This enables your child to understand that he can be responsible for a certain amount of money that he could spend at a certain period. The amount to consider giving him would depend on how much you think he will need as well as how much you are willing to risk. You have to consider some risk because your child is still starting to learn how to handle money. Even if you are willing to risk a considerably large amount, it might be detrimental to your goal if he doesn’t learn the value of taking the consequences. If you think your child is ready, have him handle a weekly allowance, as opposed to a daily one, so he learns how to prioritize and budget his money.
Teach him to save and develop self-control. Even if we already have different banking services for young children, a coin bank is still a good way to start teaching your child to save money. This way, your child can see his efforts paying off whenever he sees or feels that the coin bank is starting to get filled. You will have to make an agreement not to open the coin bank until a certain time. This will also help your child learn how to develop self-control.
Teach him to make wise decisions when buying. Consider taking your child to the grocery or department store. As you choose between identical items, you may want to “think aloud” on why you chose one item over the other. You may explain the concept of buying by the bulk or the concept of preferring quality over quantity and so forth. Exposing your child to this kind of decision-making activity will help your child eventually make wise buying decisions on his own.