Kids and Money

I remember taking my 2 oldest to the grocery store one time. They were probably 4 and 2 years old. They were both asking for a fruit that was out of season and therefore pretty expensive. I had to explain to them that certain fruits were on sale for less money and that particular fruit they wanted was not on sale and cost more money. So, every time they go to the grocery store with me they ask which fruits are on sale.

It’s never too early to begin introducing your child to money and how money and markets work. They will eventually become adults and need to be aware of how to manage their own money effectively.

Ways to help your child learn money concepts

1. Do fun activities with your kids. The Ultimate Preschool Activity Guide and The Ultimate Kindergarten Prep Guide both have activities that allow you to learn about the different types of money and even prepare a grocery budget.

2. Take your kids grocery shopping. This is probably a task you prefer to do alone, but if your kids happen to be with you while grocery shopping let them help. Teach them about items being on sale and compare prices of similar brands.

   If your kids are older, then give them a budget in cash and a list of items that they need to purchase with said money. Explain to them that if they get all of the items on the list and stay under budget, then they can keep the let over money.

3. Provide ways for your kids to earn money. Kids often see toys that they want to buy. Instead of buying everything for them, allow them the opportunity to work hard and earn the money to buy the things they want. This helps teach them hard work, delayed gratification, responsibility, and money skills. Many parents give their children an allowance for doing chores which helps them earn money. We choose to give our children the opportunity to earn money for reading books. The amount depends on the child’s age, reading ability, and length of the book read. This encourages them to read, learn and earn money.

4. Teach kids to save. Let your child dream, take them to the toy aisle and pick out a toy they really really want, and then let them work hard and save up to purchase it. It might take them a few weeks or months to earn enough to purchase the desired item, but this is a good way to teach them how to learn to save. Let them pick out a wallet, piggy bank, or jar to save their money in. Clear containers work great for young kids so they can see their stash growing.

5. Give your kids cash and let them pay. For your child to fully grasp the concept of money they need a tangible object to touch. So, when they earn money for chores or reading or whatever be sure to give them dollars and coins. Help them count the money they have earned. And then when they are ready to buy that coveted item they have been saving up for, let them count out and hand over their own money—even if you are holding up the line. This helps the concept of working hard and purchasing become real.

6. Teach your kids about giving. Kids learn from you. They are watching what you are doing. So let your kids see you giving and even involve them in giving. Let them put the tithing envelope in the offering plate at church, let them help you shop for a family in need, let them offer to purchase someone’s meal. This will help build a healthy attitude toward giving.

7. Talk to your kids about “grown-up” money terms. If your children are old enough, then it’s ok to share with them how mortgages, credit cards, budgets, stocks, and interest work. Obviously, it would need to be explained in terms your child would understand. For example, with mortgages, “A mortgage is money that you borrow from the bank to buy a home, but you have to give the money back to the bank over many years. And the bank asks for extra money because they shared their money with you.” These terms don’t need to be mentioned all in one sitting—that is overwhelming and confusing for adults, so more than likely it will be confusing for a child too. Just sprinkle the terms in through normal conversations, like when you mention you need to pay the electric bill you can talk about how you have to pay money for things like electricity, water, gas, etc. and you have to make sure you have enough money in your account so that they keep working.