Preschoolers are eager to learn. They constantly observe the things going on in their world and end up making their own conclusions or asking lots of questions. When it comes time for a child to learn about money, sometimes the best way to teach is through example. These tips will help parents introduce important concepts to their children about earning, spending, and saving money.
First, find the teachable moments. You don’t have to be a licensed teacher to tell that your child is eager to learn new ideas. The next time you make a trip to the bank or the ATM, explain what you are doing and why. If you put the card in the machine it gives you money, and the money can be used to buy things that you need like food, clothes, and gas.
It’s also a good idea to know when to stop the lesson. Preschoolers will not pay attention to one thing for very long. There will be plenty of opportunities for you to explain more about money and how it works. Explain a little bit of time. When your child’s mind is on to something else, the lesson is over.
Don’t overload your child with information. Learning about money is extremely complex, but the shorter your lesson, the more likely your child will remember what you have taught her. At four years old, your child won’t have any use for concepts like interest and credit. You can leave those parts out for now.
Ask your child questions. Open-ended questions about money can get them thinking. You can ask things like: What do people do with money? Why do people need money? How do people get money? You can begin to introduce concepts like price, too, by discussing whether or not you have enough money to buy something you want.
Set a good example. It’s a good idea to show or represent how you save money regularly. Explain why you do it and help your child save money too. When they are very young, saving money with a bank account is too abstract. Get a glass jar and let them watch as the jar is filled with coins. As your child what he or she might like to save up to buy and check back periodically to count the money for your child and see if there is enough. Encourage your child to leave some money in the jar all the time, even if he or she wants to buy something.
Finally, when you go shopping, explain to your child that you have rules for what you can spend money on. No doubt at some point they will beg you to buy them something and throw a tantrum when you refuse. Explain to your child that you can’t spend money on toys and candy because you need it for other things, and hold your ground. This will be important later, when it’s time for your child to set a budget of his or her own!