Children are born learners. In the first five years of life, they pick up a tremendous amount of knowledge about themselves and their relationships to other people and the world around them. This is an ideal time to begin teaching them the basics of sound financial management.
How families use money can influence young children into adulthood. Through parents’ teaching and example, kids can become financially secure adults or grow up to live paycheck to paycheck, in a state of constant financial anxiety.
Here are some ideas for helping your preschool-age children develop healthy, productive financial attitudes and behaviors:
- Look for the “teachable moment” when a child is open to a new idea. For example, if your child is watching you get cash from an ATM, explain that you had to put money into your account at the credit union before you could use the machine to take money out of your account.
- Know when the moment is over. A preschooler’s attention span is pretty short. Make the activity as interesting as you can, and end it when your child’s mind wanders.
- Play together. Playing grocery store and other similar activities with children not only teaches them basic money concepts, but also reveals what they don’t yet understand and might be ready to learn.
- Set a good example. Let children see you doing the things you want them to learn, such as making plans to save for a goal and accepting spending limits.
- Plan together. Involving children in planning for family events helps them learn to be responsible for wise spending. A child who has some say in where to go on vacation and what to do there is more likely to accept spending limits.
- Plan earning opportunities. When children are ready to make money decisions (when they can tell coins apart, can count and have chances to spend), consider giving them the option of earning their own spending money by doing simple chores, such as setting the table for you occasionally. Teach them to save this money for items they want.
Continue to build on these early lessons. Helping your children become financially independent adults is a life-long gift.