Most children are familiar with the concept of money at a very young age even if they cannot comprehend it fully. A toddler knows that to buy things they have to pay for them. Toy cash registers and money are manufactured so that young children can play pretend. Many parents have already established a piggy bank for their toddler to save their pennies. While familiarizing your child with money is important, familiarizing them with smart spending and saving habits is crucial so that they are able to carry the knowledge throughout their late childhood, teenage and adult years.
It is important that parents lead by example. Parents should show their children how to manage their money effectively by doing the same. Allow children to see the thought process that goes into making a large purchase. Take them with you when you are buying a new washing machine. Casually discuss the options and reasons for your final decision while you are perusing the store.
Children should be exposed to the concepts of saving; it does not take much effort. Just simple comments like “oh, we need to start saving for vacation” or “honey, did you remember to put away money towards Christmas presents this month?” Children notice these subtle suggestions over time and will learn by following in your footsteps.
Rewarding with money is a way to teach your children about money. If they earn their money rather than are just given it, they are more likely to appreciate and value it. Give you child a bank to store their money in. You can get them a piggy bank or take a used coffee can and decorate it together. Help them count it and keep track of their money. Inquire about what they plan to spend their money on.
If you are planning a vacation or an outing, let your child know and give them the opportunity to save up some money for the special day. Tell them how long they have to save. Give them the chance to earn extra money by doing odd jobs around the house. Let them call grandma and grandpa and see if they can do anything to earn extra money. They will enjoy saving and spending the money they earned and will enjoy looking forward to the event.
When shopping with kids, they are bound to ask for items. Whether it is a certain cereal or a cool new toy, do not immediately say no. Every once in a while it is okay to say yes, but set guidelines. Come to an agreement of what the child must do to earn the item. Explain that they are not allowed to have the item until they have fulfilled their end of the bargain. It is important to be firm and make the child wait.
Money fascinates children, use this eagerness and curiosity to help them learn smart money habits. Make it a way of life that affects their daily life. Having good money skills can help reduce a lot of stress and frustration later in life. It is never too early to begin learning about money.