Beginning to Budget: Financial Education for the Late Elementary Years

Late elementary students, those in fourth through sixth grades, begin to develop the ability to understand abstract concepts and future planning. At this stage, teaching them about money can include adding a variety of concepts they couldn’t understand when they were younger. As parents, the real challenge is finding the time to introduce them while keeping up with the increasing schedule of soccer games, karate lessons, band practice and social demands. 

Salary, Not Allowance

At this age, your child is old enough to truly understand work for pay. Though not all parents agree, it’s worth considering tying their allowance to completing a list of specific tasks around the house. Some say a child’s “job” is performance at school, and tie allowance to that. For others, grades are a given – so allowance should be tied to other jobs like the nightly dishes, taking out the trash or feeding the family pets.


It only takes 10 minutes to go over what your child spent his allowance on, but the lesson becomes much more powerful if you keep a running tally over time. A spreadsheet program can produce colorful pie graphs that show just how much went for things your child really values, and what went for trips to the convenience store or purchases he now regrets. Some kids this age are ready to track the spending on their own, but most will still need help from one or both parents.

Budgeting and Priorities

Since you’re already categorizing expenses by tracking what your child spends, you can also give an introduction to budgeting by planning those categories for the next month. This is especially powerful if your child wants to buy a high-ticket item by saving allowance. A few quick projections can show how quickly he can buy something by saving different amounts of money – which means leaving different amounts for other expenditures. Done right, this closely mirrors the spending and saving decisions you make as an adult.

Sales and Deals

Though these don’t add up to much in the context of a child’s allowance, they can be a great tool when your young one is saving for a larger purchase. It’s most powerful when tied to time in the context of planning to buy the desired goodie. Once your child realizes she can have that new iGadget two months earlier by using the right discount, she’ll understand the concept far more deeply than if you just compared prices on paper.