While preschool-age might seem too early to teach your child about being responsible with money, they already understand that money is important in our society.
Here are six ways you can teach your preschooler about money.
1) Have age-appropriate conversations about money
Your preschooler sees you withdrawing cash from ATMs and using your credit card to buy groceries on a regular basis. These everyday moments are an ideal opportunity to introduce your child to money. For example, you can say, “We keep our money safe in the bank, and I use this machine to get some to buy our food.”
2) Demonstrate the cost of goods and services
While you’re running errands with your child, you can discuss what you’re buying, and how much it costs. When paying, let your child see you counting and handing your money to the cashier. If you’re paying with a debit card, you can tell your child, “This card takes money out of my bank account and gives it to the store.”
3) Play games involving imaginary money
Exposing your child to play with imaginary money is a good, risk-free way to help them understand the concept of paying for goods and services. Even though preschoolers’ math skills may not yet lend themselves to complex addition and subtraction, they can still play games like “store” or “restaurant” in a simple way. For example, you can ask how much an ice cream cone costs, and hand over the appropriate amount of play money.
4) Give them control over small amounts of money
While many parents of preschoolers feel their child is too young to get a regular allowance, children should still be shown how to earn and save money. You may want to put them in charge of a coin jar, which they can fill with small change that they earn whenever they perform a certain household task such as helping to set the table. This will help them make the connection between work and money, and give them a sense of ownership and responsibility.
According to a study conducted by asset management firm T. Rowe Price, children whose parents let them decide how to manage their money are less likely to spend it as soon as they receive it.
5) Let your child see you work
Another way to help your child understand the relationship between work and money is to show them where you work. If possible, bring them to your workplace for a visit, and let them see your workspace and ask questions. This can help your child understand that work is a place where you perform tasks to earn money for the household.
6) Model responsible saving and spending
Even if your preschooler may not yet understand the intricacies of financial planning, they can still be influenced by your attitudes and behavior about money. Do you argue with your spouse about spending? Do you compare prices when grocery shopping? Do you pay for everything on your credit card automatically, or do you wait until you can pay with cash? Be mindful of what your child is observing, and what message it may be sending them about financial habits.
The concept of money may seem like a complicated one for preschoolers to understand. However, with these six ways to teach your preschooler about money, they will learn basic financial lessons in an age-appropriate way.