Financial Literacy and money habits are learned at a very young age whether we are teaching them to our children or not. When children see mommy and daddy spend money they are influenced. When they do not actively see where money comes from or where it’s going, they are left to think that money is infinite and ever flowing and that the only thing we do with it is spend. They see us spend while shopping or see deliveries come to the doorstep, but they can miss the in between, such as how the money was earned, if it was saved or donated. On top of that, a lot of shopping is done online and with plastic, so there is little to no exchange with physical money which makes learning about it a little more difficult.
With all this is mind, it is imperative that we teach our babies about money at a very young age. Toddlers are even able to understand simple concepts about money. Here are some simple tips and activities to engage your Preschool aged child in learning about money.
1. Teach them about choices that you can make with the money you have. Whether they receive money as a gift or they earn it by completing chores, teach them that there are several things they can do with the money they receive. They can save it, spend it, share it, or invest it.
2. To emphasize the lesson on money choice, you can create 3 or 4 money jars or purchase a piggy bank or football that already has these sections labeled.
3. Teach them the concept of waiting for something they want to buy. Delayed gratification is a concept that is difficult for some adults to grasp, however it is a true sign of maturity and the sooner we teach it to our children the better. Have them think about a short term goal such as purchasing a specific toy, or if your child has a tablet make purchasing a new app a goal. You can also save for a trip somewhere like an amusement park or a trip to the movies. Factor in the cost of popcorn, the extra cost for seeing the film in 3-D and have them save up for that purchase.
4. Make a savings chart and hang it on the wall or refrigerator. Seeing the chart on a daily basis can help you and your child visualize your savings goals accomplish them.
5. Teach your child the importance of giving and donating. Periodically count the money in the sharing/donating jar and ask your child how they can use this money to help others. If you are a member of a church you can include the teachings of your faith.
6. Read books about money like Trouble with Money or Dollars and Sense from the Bernstein's Bears series.
7. Listen to and discuss this audio podcast produced by Sesame Street titled, Elmo's Adventures in Spending, Saving, and Sharing. Also watch the videos connected to each lesson. (After the financial crisis Sesame Street developed this educational series to help preschoolers learn the value of money.)
8. If your children consume any media, try to make sure it is ad free of advertisements. For children that are viewing advertisements, discuss each ad and teach your child to decipher whether the product is needed.
9. Have frank discussions about money with your children often. Do not assume that financial matters are concepts they cannot understand. But also do not stress your children out about money. Keep things positive, play games, use coloring books. Make financial literacy a natural part of life.
10. Use practical everyday situations like trips to the grocery store to show them financial responsibility. Make a list and use coupons. If you are at a department store and have a coupon code on your phone, show them the receipt and let them know how the discount saved you money. If you are using a physical coupon let them cut it out and present it to the cashier.
How do you incorporate lessons about money with your child? Please share.
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