Children are curious beings, that’s just natural as their young inquiring minds try to make sense of what they see around them. What do you do when they start asking you about money? Maybe they see you taking money out of an ATM one day, or they are always asking you to buy fast food even though you’re on a tight budget. These are great opportunities to start teaching your child about money and how it works. Teaching them about finances at a young age is great financial education and can shape their entire perspective on spending and saving behaviors as they grow older.
If you are on a tight budget or maybe you’re cutting down spending to save for an upcoming expenditure, it’s best to be upfront with your child about it. Explain the situation in a manner appropriate to their age, and even get them involved to make it fun! If, for example, you’re on a tight food budget, have them help you plan the menu for the week and take them grocery shopping to teach them about shopping and price comparison. Depending how old your child is, you can even have them help you with the cooking!
Have you ever heard the saying “money doesn’t grow on trees”? I know many parents who have said this, including mine. Young children often don’t understand that money doesn’t just appear, even when we’re pulling it from the “magical” ATM. A piggy bank is a great tool to help teach this concept to your child, especially if they have an allowance or some way of earning money. As they earn money they can put it into their piggy bank for safe keeping. If they need $5 to buy something they want, they must have put $5 in the piggy bank in order for them to take that amount out. The same goes for ATM’s, if we want $20, there has to be at least $20 in the account.
These are just a some of the ways to start teaching your child about money. For more, visit the article “Top Questions Kids Ask About Money (and how to answer)”