5 Ways to Teach Little Tykes About Finances
It’s important to teach children about money from the time they start earning their first pennies. Kids might learn about money from a textbook at school or they might learn with “play” money, but they also need to have experience with real money in the real world. Kids are curious about money. My six-year-old loves to collect pennies and put them in a jar to see how many he can accumulate. Children learn early that if they get a certain amount, they can start buying things.
Here are some ways to help your little tyke learn about money:
1- Teach children the value of money. Put a pile of coins on the dining room table. Start with pennies and teach your child that each penny equals one cent. Then move on to nickels. Put five pennies next to a nickel and tell your child that it takes five pennies to equal one nickel. Then do the same with other coins: five nickels equal a quarter, but so do two dimes and a nickel. I can also use twenty-five pennies.
2- Give them a place to put it. It’s nice for kids to be able to see where their money is going and to visually watch it grow. My youngest kids have a three-section savings box for their money. Each section has a specific purpose: one for savings, one for spending, and one for tithing. When my kids earn money, I help them put their coins and dollars in the right section. When they have a certain amount in their savings section, it goes into a savings account at the bank.
3- Teach kids that work equals money. Let kids find different ways to earn money. I remember being only about seven or eight-years-old and crushing up rose petals to make perfume. I think I may have even used my mom’s blender for that purpose (sorry, mom.) I went door-to-door selling my fragrant perfume to the neighbors. My business venture didn’t make me a millionaire, but I learned a little about creating a business, marketing, and how to budget all those quarters that I earned.
4- Let them pay for things. As parents, we provide the necessities: food, clothing, shelter, and educational necessities. There’s no parental contract that says that we need to bribe provide our children with the coolest toy of the week. If your kids really want something, let them buy it with their own hard-earned money. They’ll probably take better care of their toy too.
5- Allow them to make mistakes. It’s painful to watch children make mistakes - especially when it’s so easy for parents to step in and prevent pain and tears. Think of it this way: It’s much easier if a child learns from their mistakes while they’re young. If a seven-year-old decides to squander away his money on Dum Dum suckers and doesn’t have enough to go to the movie with his best friend – he’s learned that he should budget his money a little more carefully next time. If someone foolishly spends his money when he’s older and living on his own, he may have to skimp on the food budget, gas allowances, or even rent money.
Discuss money on a regular basis with your child. Help your kids make goals and learn how to save. I know of some parents who will match any dollar amount of money that their children put into savings. If we start teaching our little tykes early about money smarts, they will have a great head start on their future.
Popularity: 17% [?]
Related Posts:
Trackback URL for this post:
http://masteryourcard.com/blog/2008/05/09/5-ways-to-teach-little-tykes-about-finances/trackback/
