Children and Money

When should children begin to learn about money?  I think, "the sooner the better."  Even very young children need to understand concepts about money.  The first thing they must understand is where money comes from.  I remember one of my young children saying, " Just go get some money from the bank."  Another statement made was, " Just write a check."  Children need to learn that money is usually earned through hard work.  They need to understand that parents get paid for their work.  They also need to know that we have to put money into the bank before we can withdraw it from an ATM or write a check.

The next step in teaching young children about money is to teach them to count and use money.  This can be done by providing play money and a pretend store or restaurant.  Children can also help us sort or count loose change.  They can help us roll coins and add up the totals. I googled and found a lot of good internet sites that teach children about money through games.

I divide money management into three simple categories:  spending or living, sharing or giving and saving.  Children can learn about how our daily spending falls into these divisions.  Parents need to set a good example on finding balance between these categories.  They need to teach children that families can set goals, create budgets and then communicate about money with each other. 

Children can be included in family decisions regarding everyday spending.  Children can be given opportunities to make spending choices of their own.  Teach them to comparison shop when buying items.  Talk to them about value for their money.  Talk to them about planned purchases before you actually go to the store.

Young children often can not visualize abstract thoughts like money in a bank account.  They probably need to begin using a piggy bank to keep their own money.   Parents can discuss making plans to save money for something the child wants to buy.  Then they can help the child count and save in their piggy bank.

 Teach children about the pitfalls of "impulse buying."   Decide how you will handle the begging and whining that can occur when shopping with children.  Once the pattern of rewarding this behavior begins, it just becomes harder to change at a later time. Every parent has suffered the temper tantrum that can occur in the checkout line by the shelves of candy.

There is so much that should be taught to children about money.  I will continue this discussion next week regarding helping older children learn to manage money.