At what age can I start teaching my children about money?
Start early - it will lay a strong foundation to ensure they have success with money throughout their whole lives.
Young children (3 & 4 year olds) can develop an understanding of basic money concepts. You can start by playing games, such as grocery store, where they learn that money is exchanged for objects. As children get older (5 & 6 years old), you can work on identifying coins, counting a set amount of coins and giving them money to spend. Continue to build upon that as they get older.
Children learn about how to handle money by watching their parents.
How do I start teaching my children about money?
Keep it simple and age appropriate.
Let your children handle your money when paying at a store. Trips to the bank or store can be used to start a conversation about your values and how you use money. Trips to the ATM can bring about a conversation that there is not an unlimited supply of money and that you can’t take money out that you haven’t put in.
By talking with your children, you can shape their thoughts on spending, saving and sharing money.
What are some of the main ideas that I should help my children understand?
In a nutshell, they need to understand….
- most money is earned
- there is a difference between needs and wants
- the principles of spending, saving and sharing money
Explain that mom, or dad or both get up and go to work every day to earn money. Money allows you to buy the things that you need like food, clothes, and electricity to light the house. It also allows you to buy the things that you may want. Explain that you may need to wait to purchase the things that you want. And finally, let them know that it’s nice to share some of your money with causes you believe in.
Won’t my children learn about money in school?
Children may learn money basics in school, but there are limitations.
Kids learn best by experience and practice which will happen outside of school and where parents have the most influence.
What is the best way to teach my children how to manage money?
The best way is give them some money of their own to manage!
This could come about in many ways: an allowance, birthday money or by getting paid for doing odd jobs around the house. It is up to each family to decide what would work best. When a child has their own money they have to decide what to spend it on. They won’t always spend it well, but that’s part of the learning.
How do I prevent them from making too many mistakes on how they spend their money?
Talk with them.
Before your child buys something, discuss with them if there might be other ways they would like to spend their money. Point out the trade-offs of each choice, but leave the final decision to them.
Discuss their long term goals. Is there something bigger they would like to save for? This will help teach them the habit of making good decisions.
When they have decided on a purchase, teach your child about comparing prices for a specific product at different stores to see where they could get the best price.
What if they make a mistake?
Your children will make mistakes, everyone does!
Mistakes are learning opportunities. Use this as a chance to discuss the choice that they made and the reasons behind it. Help them work through what they could do next time.
It is much better to learn the lesson of poor money management on smaller purchases as a child rather than on bigger purchases as an adult.
Everyone needs to be taught how to manage money well. It's best to start early with your children, but it's really never too late to start.
For more information about teaching children money management skills, contact your local community literacy coordinator.
Community Literacy Coordinator - Revelstoke
Columbia Basin Alliance for Literacy