Teaching young children about money doesn’t have to be a complicated job. My 3-year-old loves playing shop. She’ll gather little items and toys from her room and have me buy them from her. Then she buys them back and we start all over again. She usually wants me to pay with coins, but sometimes she’ll tell me that I need to pay by “card.” When we go to the store together, she’s very observant and asks me questions about the card machine, cash register, and just about everything else. Children learn by repetition and playing over and over. Every time we play this game (or go shopping or talk about work and money) she’s learning a little about it. Here are a few concrete things you can do to help your young children start off on the right path to good money management in their later life.
TALK ABOUT MONEY
Even though my oldest is only 3, I still talk to her about money, buying and selling, and work. When we shop, I often mention prices and compare items out loud. Take time and talk when you’re shopping with your children. Let them see you pay with cash. Let them see you budgeting regularly. This is wonderful preparation for when they’re older and you can show them an actual budget and how to set one up.
ALLOW THEM TO HAVE THEIR OWN MONEY
Here are some options on how to do this:
- Give them a weekly (or monthly) allowance
- Have them earn money for short, simple jobs (for their age and attention span)
Some thoughts on household jobs. I don’t think children (of any age) should be paid for every job they do around the house. Most jobs at home should be done together (or divided up) because living as a part of a family means you share household responsibilities. You could decide to have a few tasks always be paid jobs or only “extra” jobs (ones that are not regular or involve more work).
For young children especially, don’t expect or demand perfection. (This is something I struggle with for my 3-year-old who often wants to “help” but can be rather “messy.” She puts her clothes away in the drawer and I am learning to let go of the idea that everything will be in neat, tidy, organized rows inside.)
Some ideas for 3-year-old jobs:
- clean up a small bunch of Legos or blocks
- Put away a game
- Match socks from the laundry (unless you have a ton!)
- Put away all the stray shoes in their place (We always seem to have stray shoes around the house!)
- Water the houseplants (We only have a few so this is an easy and fun job.)
When you pay little children, do it immediately and enthusiastically after the job. Small children have a small attention span and the reward should be right away.
TEACH THEM ABOUT SAVING
When your children are young this is a good time to introduce the concept of saving.
One way to do this is to keep a coin jar in a public area. Every time you find stray coins (or bills) put them in the coin jar and talk about how you (as a family) will save your coins to buy a special treat (for example, ice cream). When the jar is full, as a family count out the coins and decide what treat to get.
Another way to introduce saving is to start your child with saving, spending, and giving jars. This is a popular method of introducing these concepts to children. Gather 3 containers and label them “Save”, “Spend”, and “Give”. Then, when your child has some money, talk to him or her about putting a little bit into each container and what each is for. Children can use the money in the “Save” jar for buying a larger toy or item they really want. The “Spend” jar can be for immediate treats or snacks. The “Give” jar can be for tithing at church or another charity.
TAKE THEM SHOPPING WITH THEIR MONEY
When shopping with little children, it can help to talk about the prices of the items and give them a limited selection of items to choose from (within their price range). Little children can get overwhelmed with too many choices.
talk briefly about the cost and give them a limited selection to choose from (if your son loves cars – show him 2 cars and let him choose). Children can get overwhelmed with too many choices.
My husband and I talk about his job with our daughter often – what he does, that he makes money, and why it’s important (need for shopping for food, clothes, etc. paying bills, etc.). She has also visited his office once, saw his desk and met his co-workers. My daughter is only 3 so she’s limited in what she can understand about working, money, and jobs. Still, it’s important to talk about these things and encourage them to ask questions and be curious.
SET A GOOD EXAMPLE.
Last, but not least, you need to set a good example for your children. This is the most important part of being a parent in all areas of life. If you want your children to eat healthy foods, you need to eat health foods yourself. If you want your children to be responsible, you need to take responsibility for your own life. If you want your children to manage money well and live debt free, you have to do this yourself! As you learn and grow and work toward your money goals (living debt-free, saving for a house, etc.), your children will grow up seeing, hearing, and learning good money management from you. Talk to them about it! If you are struggling to get out of debt, see my post on getting out of debt for some tips to help you.
My dad was not very good at managing money. He spent carelessly and didn’t save for the future. As an adult, I look back and now wish someone had talked more with me about money and saving and living without debt when I was younger. Even though I am living debt-free now, it would have been nice to be better prepared when entering adulthood and making major life choices (where to go to college, how to manage money and keep a budget, what to do about debt, etc.). Teaching young children about money will help set them up for success later on in life, especially if you continue to talk about money management and budgeting as they get older. I’d love to hear your ideas for teaching children of any ages about money.