Money habits are learned at a very young age. When children see mommy and daddy spend money, they do not actively see where the money comes from. They see deliveries come to the doorstep without knowing if the money was earned or donated.
Watching you spend, they can mistakenly think that money is infinite and meant just for spending. Online shopping with credit cards can add more confusion.
With all this is mind, it is imperative that we teach our babies about money. These simple activities will grant your preschooler a solid foundation of financial literacy that will help them build wealth the rest of their lives
1. First, teach them about choices. Whether they receive money as a gift or they earn it by completing chores, they should know they can save it, spend it, share it, or invest it.
2. To emphasize the concept of choice, create 4 money jars and designate one for saving, one for spending, one for investing and one for giving. You can also purchase a piggy bank or football with these categories pre-designated.
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. It is a true sign of maturity, and the sooner we teach it to our children the better. Fun saving goals include:
– a specific toy
– a new app for a tablet
– a trip somewhere like an amusement park or movies. Factor in the cost of extras like snacks and have them save up for that too.
4. Make savings charts for both you and your child, then 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. Let your child watch you save toward something while they do to inspire them.
5. Teach your child the importance of giving and donating. Periodically count the money in the sharing jar, and ask your child how they can use this money to help others. If you are a member of a church, temple or mosque you can include the teachings of your faith.
6. Read books about money like Trouble With Money or Dollar and Sense from the Berenstain Bears series.
7. Discuss Elmo’s Adventures in Spending, Saving, and Sharing, an audio podcast produced by Sesame Street to help preschoolers learn the value of money. Also these Sesame Street videos offer more lessons.
8. Teach them to decipher between a need and want. Reduce their desire for unnecessary new things by making sure any media your children consume is ad free. When children view advertisements, discuss how ads make us want to spend money and confuse our needs and wants.
9. Have frank discussions about money with your children often. Do not assume that financial matters are concepts they cannot understand. Make financial literacy a natural part of life.
10. Teach them about coupons and sales. 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.
These practical everyday lessons go a long way to show, not just tell, children about financial responsibility. Along with their ABCs, teach them about money. If you don’t, who will?
Parents, how do you incorporate lessons about money with you child? Please share.