It is probably one of the most common financial questions; “When should I start teaching my child about money?”
Most financial experts agree – the earlier the better! Starting early definitely has its benefits. Not only are children eager to learn but it provides a big window of opportunity to not only make the lessons fun and meaningful, but also provides lots of time for them to learn from their mistakes – and at a time when the stakes are low.
But how young is too young? Of course part of this answer hinges on how ready you think your child is but generally by age 3 you can begin to lay the foundation. We think the best approach is slow and steady, and using everyday situations as teachable moments. Learning about money is no different than learning how to do the laundry, cook a basic meal or two or bake your favourite cookies. It requires practice and some trial and error. Who hasn’t replaced sugar with salt accidentally in their first baking experiences?!
Here are three fun ways to teach your preschooler about money:
1. The Waiting Game
Patience and delayed gratification are lessons that will serve your child well throughout their life, especially when it comes to savings. Having the long-term perspective and ability to see the goal and envision the feeling of reward upon achieving it will set the stage for your child to be financially savvy.
So how do you do it? Tell your child that you’ll give him a cookie now if he wants it but you’ll give him two cookies if he can wait an extra ten minutes. Your child may need a little encouragement to wait for that second cookie. Truth be told, many adults would have a hard time waiting too, so don’t get discouraged if it requires some work to get them to consistently wait for the big payoff.
2. Playing with Money
At this age, introducing a piggy bank so that they can begin to collect coins is a great way for kids to get familiar with money and work on their counting skills. Talk about the different types of coins including their sizes and values. Introduce one coin at a time, and as you introduce a new coin, have your child pick out of a pile the coins that they know.
Another suggestion is to role-play the typical scenarios in which you would need money. For example, create a simple grocery store or coffee shop at home complete with a cash register. The beauty of this age is that imaginations are vivid and a shoe box or similar item will fill in brilliantly for the real thing. Take turns being the shopper and paying for groceries. Of course, including your little one in your own day-to-day shopping is also a fun learning opportunity – well, at least most of the time!
3. Making Choices
As we all know, money doesn’t grow like weeds and, like the song, we can’t always get what we want. Making choices about how to use our hard-earned money is a fact of life and an important lesson to learn early on.
When you’re in the grocery store with your child, talk about the choices you make and why. For example, compare your two favourite cereals and talk through your decision making: “We like both of these cereals, but toasty o’s cereal is on sale so let’s get that one this time,” or “These chips are a nice treat but if we don’t buy them and instead use that money to buy extra bananas we could make some muffins.” You get the picture; it’s all about modelling and giving your child practice in making choices. The trick when letting your preschooler make the choices is to make sure you offer your child two options that you’re okay with.
So there you have it; three easy ways to begin to lay the groundwork for financially savvy kids. Have questions? Get in touch; we’re always here to help.