3 money skills any kid can master by age 10

REUTERS/Toby Melville

Now that your child has hit those grade school years, he's picking up so many new things every day: pushing himself on a swing, zipping up his own sweatshirt, and understanding the basics of reading and math.

With his skills growing as fast as the rest of him, it's a good time to teach him more about money as well. Right now his brain is absorbing everything, and the lessons he learns about using money wisely will help him his entire life.

We asked experts to tell us about three financial fundamentals that children between ages 6 and 10 could — and should — master. Profit from their insights by introducing the tasks below.

1. Knowing the difference between wants and needs

It seems like such a simple concept, yet it's one many adults struggle with, says Danny Kofke, author of "A Bright Financial Future: Teaching Kids About Money Pre-K Through College for Life-Long Success!" Knowing how to discern the gotta-haves from would-be-nices will go a long way toward helping your child avoid debt.

"Talk to your kids about the basics that you absolutely must have, such as food, shelter and clothing. Then explain the trade-offs people have to make for things above and beyond the basics," Kofke recommends.

"For example, one of my kids once asked me why we didn't have a bigger house and whether we could move to one. I explained that yes, we could maybe get a larger house. But then Mom wouldn't be able to stay home because she'd need to get a job. I was a teacher at the time, and I added that I would probably need to leave my teaching job and find one that pays more."

Once you explain all the things you'd have to give up in order to acquire more, your children may start to feel that some formerly tantalizing wants aren't so appealing after all.

2. Getting comfortable with cash

Learning the different values of currency is important — for example, that a quarter equals two dimes and a nickel, and bills are more valuable than coins, says Melanie Hasty-Grant, a financial adviser, family therapist and co-founder of Waterstone Private Wealth Management who runs a financial summer camp for children. But when it comes to figuring out what money is worth, there's no substitute for actually using it.

By the time your child is in the early years of grade school, she's old enough to go up to a counter and hand over money for something she wants, says Kofke. Before leaving home, you can help her count out the cash required. This helps her conceptualize the impact of spending and consider whether she really wants to part with all that change and dollars.

And when you're out shopping with your child, try to use cash to pay for things rather than credit, Kofke recommends. "We always did that with our kids, just so they would better see what things cost, and so that they could witness the process more easily. Your kids will see that you have earned the money, and now you are exchanging it for a certain item or items because you have decided you want tor need them, and that they are worth it."

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3. Spotting and resisting an upsell

Companies and stores are always coming up with sneaky ways to get us to part with a little extra money — or sometimes a lot of it. The sooner your child is wise to these come-ons, the faster he'll become a responsible consumer.

Hasty-Grant recommends introducing the idea of the upsell with a simple exercise. At the market, compare no-frills products with tricked-out ones — say, a store-brand cereal in a plain box versus a major brand cereal in a colorful box. Bring up how much more expensive the latter is, and how what's inside the boxes isn't really so different, but the costlier one has fancier packaging and features a well-known brand.

You can do this at the toy store as well, Hasty-Grant adds: "Just because a bubble-blowing set has a picture of a Star Wars character on it, will it be any more fun to play with or work better? Explain that you are paying more because of the decoration on the label."

Have a conversation about the commercials that run on your child's favorite TV channels too. "While watching a show together, point out that this is part of how we kind of get lured into buying certain things — we see them over and over on television, so we think they must be good," Hasty-Grant says.

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