Teaching your kids about money can be super simple and even fun! Young children love to copy us and handling money is no exception.
Hi, I’m Sam. I’m on a mission to help women take control of their finances.
How? With some simple tips around budgeting, saving and investing.
Read on to learn 4 simple activities to reach some essential life skills for your children.
Why Bother Teaching Young Kids about Money?
Before you know it, your darling little newborn will be an opinionated pre-schooler and start bugging you for new toys and vacations to Disney World. Ugh!
Take action now before your kids might be passively careering into a life of unrealistic ‘Kardashian’ expectations in the future
Without learning the basic life skills of finances at a young age, kids won’t make that connection between spending money, and saving responsibly for the future.
What’s the best age to start teaching kids about money?
You can start when they’re as young as 3 years old!
Start by teaching a few simple concepts through play, then build on them as they get older.
Activities like the ‘piggy bank’ and ‘shopping trips’ are also a great way to bond with your child.
When done together, budgeting and saving can even be fun.
Teaching your child about money through play: Activities for 3 to 5 year olds
Children are becoming fully self-aware as they hit this age.
This is the perfect time to introduce them to basic choices about purchasing and getting them familiar with notes and coins.
Activity 1: Coin Sets
Coin sets are a great way to introduce and explain money to a child.
Place a set of coins in a special box or bag.
This set is for your child to play and become familiar with currency.
Play with the coins together, comparing the values and size of each coin.
As your child gets older you can teach them how the coins add up to $1.
Activity 2: Piggy bank Savings
A piggy bank is a handy toy for showing young kids the value of savings.
Have your kiddo pick out their very own pig bank.
Or if like mine and they are getting a hand-me-down, they can pick out a special space to store their piggy bank : )
If there are little siblings around, make sure it is out of reach of curious little hands.
Get them started with a start-up deposit of say $3, and let them deposit the coins themselves.
They want to repeat the process several times and enjoy that satisfying clink of the coins.
Any additional deposits will come from gifts and from ‘special chores’ (those above and beyond their regular chores).
This activity is like a rite of passage for a toddler. It’s a great way for them to touch and see their savings grow and grow.
Activity 3: Shopping Trips
The shopping trips activity is all about teaching young kids how to save money for something they want rather than just asking you to buy it for them.
In the late 1960’s a professor at Stanford University established the iconic marshmallow test .
Groups of young children were given a choice: either enjoy one marshmallow now or two marshmallows if they waited for 15 minutes.
The children who waited 15 minutes were found to have better life outcomes as adults
They had higher educational attainment and weight control, for example.
What does this study teach us?
That it’s never too early to teach our kids the importance of delayed gratification!
The same goes for saving and working towards a goal to get something you want, rather than just having it handed to you.
When your kiddo tells you they want something, like a £15 toy they see on the TV, for example, use it as an opportunity to teach them about saving for a goal.
An Example:
Step 1:
“Mama, I want that Truck!”
Reply with ‘That sounds great! I can help you save for it and when you have enough money then you can buy it ALL BY YOURSELF! How exciting is that!!!’
(Parenting tip: saying no without saying the word ‘no’ can avoid a lot of tantrums).
Step 2
Take a picture of the toy with your phone.
Step 3
Next time you are out and about with your child, pay for something using cash.
Let him or her hand the cash over to the sales clerk and keep the change in their pocket.
Step 4
Soon after you get home take the cash to their piggy bank and deposit the change.
Add a little fanfare to the occasion and remind them of their savings goal.
Step 5
From time to time, count the change in the piggy bank together.
Show your child how much there is left to save before they have enough cash for their toy truck.
Step 6
Once they have hit their savings goal, go to the store together to buy the toy.
Let them pay with the cash themselves using their piggy bank money.
Bricks-and-mortar stores work much better than online stores.
If the toy was only available online, you can buy it ahead of time and then make a ‘pretend store’ at home.
You can play the role of ‘sales clerk’ for them.
Success!
Activity 4: Special Chores
This task ties in with the Shopping Trips activity in that it helps them accelerate their savings goal by earning extra cash.
Special chores should be in addition to their regular chores, which are part of their responsibility as members of the family.
Family chores teach them how to become responsible adults in their community.
Examples of special chores could be helping you with extra jobs in the kitchen, washing the car, or tidying the back yard.
Before you start the chore, you should explain how much they would earn.
Explain that it is going towards savings for their toy.
Have the cash ready so that you can ‘pay’ them right away.
Let them deposit the money into their piggy bank after completing their chore.
Summary
Try these four activities with your kids to give them a flavour of handling money from a young age.
As you can see the lessons incorporate an element of play, while imparting key life skills of counting, budgeting, saving, and goal setting
But what about the Grandparents?!
It might be a challenge to get a child to focus on saving for one toy when a doting grandparent is in the mix.
They may overrule your best efforts and shower them with a dozen toys at every visit.
So what’s a parent to do?
Well, you can tear your hair out. Make a cup of tea. Down a shot. Do all those things, you have my blessing.
After you’ve done all that you can remember that it is not just the toy that matters to your child.
It’s the bonding time with you that’s important
Helping you to pay for that coffee at Starbucks and dropping the coins into their piggy bank.
Counting out their coins with you.
Celebrating with you when they reach their savings goal.
All those things are a positive experience, they are not a chore for your kid.
The plastic toy at the end is probably not what they will remember 20 years down the road.
The positive association between money management and spending time with their parents is something that they will take with them all the way into adulthood.
If their grandpa or aunt or cousins shower them with toys – it’s no big deal.
You should persist with this exercise anyway, it’ll be worth it.
Checklist
- Prepare a coin set of a selection of coins and place them in a special box or bag
- Get a piggy bank for your child and prepare a starter deposit of $3
- Make a list of special chores.
- Get a stash of coins and notes ready for the special chores when the opportunity arises
Round Up
An early introduction to money, budgets and savings will teach your child that money is a regular and normal part of family life.
This will in turn normalise discussions around budgeting and saving.
It will take the stress out of conversations that involve saying ‘no’ to an expensive purchase.
Teaching your child about money through playful activities is a win-win scenario because it allows for you to bond while learning and gives them a sense of achievement when they hit their savings goals.
Starting as early as age 3 is a great way to introduce the concept of money and financial management to your children.
Even if your kids are older, it’s not too late to start!
What activities do you find helpful when teaching your kids about money? Share some tips and success stories in the comments!
