Money Development Stages for Kids

#683: Candy now — or a toy later? You slide play money across the table and let your kid choose.

That moment kicks off this episode, where Dr. Stephen Day joins us to talk about building a “mini economy” at home. 

Dr. Day is the director of the Center for Economic Education at Virginia Commonwealth University. He also holds a PhD in social studies and economics curriculum and instruction. His work looks at how kids form money habits long before they deal with real paychecks, budgets, or credit cards.

We break down how a mini economy actually works. Kids have job titles tied to age-appropriate chores. They earn play money. They spend it at a small household store set up on the kitchen table. The store might sell candy, small toys, or privileges like extra screen time. Parents set the prices. Kids decide whether to spend right away or save for something bigger.

You hear how this plays out inside Day’s own house. A three-year-old takes on the role of “zookeeper,” feeding the cat and picking up stuffed animals. A seven-year-old creates a weekly plan that alternates spending and saving, using patterns she learns at school. A five-year-old chooses to donate part of his earnings instead of spending anything. The system stays the same. The choices vary by kid.

The conversation moves through childhood stage by stage. Early years center on routine, structure, and basic trade-offs. Elementary school becomes the key period for practice, when habits and norms take shape. Middle and high school bring longer planning timelines, more independence, and deeper conversations about work, contribution, and goals.

We also dig into questions parents ask all the time. Should kids get paid for chores, or should chores come with living in the house? Day explains how families can separate family work, paid jobs, and service work so kids understand why they are doing each task. Clear categories help avoid confusion about motivation and responsibility.

Busy schedules come up, too. Sports practices, travel, school events, and late workdays often knock chore systems off track. Day explains how vague expectations create conflict and why job titles and defined duties bring structure even during chaotic weeks.

Throughout the episode, the focus stays on practice, not lectures. Kids do not learn money by hearing explanations. They learn by earning, choosing, saving, spending, and living with trade-offs — all inside a system small enough to fit on a kitchen table.

Resource:

Book: How to Teach a Kid to Save https://amzn.to/4jVOtze

EconEdLink, a CEE program https://econedlink.org

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

(00:00) Intro

(02:00) Teaching kids money

(03:59) Mini economy basics

(06:20) Money skills by stages

(10:41) Starting at age three

(12:02) Cat job example

(16:08) Goods versus privileges

(17:27) Bugging versus choices

(18:11) Paying for chores

(20:22) Family job service

(24:56) Busy weeks and chores

(33:21) Low-consumption kid example

(39:17) Shared jobs and teamwork

(43:34) Exchange rate to dollars

(1:00:28) Investing, 529, compound interest

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