My mother-in-law is very generous when it comes to giving my children money. It usually comes in the form of $5 or $10 bills inserted into holiday cards or in person during the twice-a-year visits, at which time she chooses to hand them money in a covert way; a sheepish attempt to hide the fact that she’s spoiling them.
During a recent visit to the local grocery store, my 5-year-old, carrying one of these $5 bills, passed in front of this display of miniature cars that read “4 for $5.” He was pretty excited about the “deal” and continued to make his selections.
At more than $1 per car, I failed to find the deal in that, but I proceeded to praise his ability to find such a bargain. As we were leaving the store, I asked him “Why do you think the store was selling those cars for that price?” to which he promptly answered “maybe they really like kids.”
How early in our children’s life should we begin to teach principles of sound money management?
What can parents do to teach their children about money?
As we strive to establish other good habits in our little ones, many parents ignore financial awareness. But, as with everything else, most children start acquiring life-lasting concepts from a very early age and basic money management skills should be as gingerly peppered around given learning opportunities.
Lessons about money can begin as early as you notice that your child can instinctively assign value to his or her belongings.
But you have to get creative.
When my wife and I go shopping for groceries, for example, we give my son his own shopping list. We write down a dollar amount next to each item and help him to find a matching or lower price. In addition to keeping him focused on a task and busy while we do our shopping, he is learning important concepts about value along with simple math skills.
There are many ways to turn daily consumer moments into lessons. As your child grows, he or she will sense a meaningful connection with money and goods, learn to make good decisions on how money received is to be spent or saved, and the financial mistakes they make will be fewer and occur much earlier in their lives instead of when it really counts.
We read books to our children every day and they grow up to love reading. In this same manner you can help your child develop early financial awareness and interest.
Finally, whether or not you believe it, your children do pay attention to everything you say AND do, so get control of your own financial life!
My parents were great with money, in that they didn’t give me much! I had to do chores and delivery papers to fund my hobbies and so on, which was a great lesson for future life. I do sometimes wonder though if they’ve made me too cautious about money. Perhaps kids need to be able to dream a bit… that’s what being a kid is about, I guess.
Some of your tips are more practical then philosophical though, which is cool. I never did grocery shopping on a grand scale until I left home, for instance.
Absolutely agree that kids really need a better handle on the management of money. I wrote a post last year to something very similar. Teaching this in school. I think we’re past the point of needing HomeEc and Shop class as the only electives in High School. How about an elective for money management?
It’s always a good time to talk to your kids about money and saving. I enjoyed your item, and mentioned it today in our blog roundup. I hope you enjoy.
“I proceeded to praise his ability to find such a bargain.”
I don’t think I would have done that. I think I would have gotten down on eye level with the child and said, “You know, you can get these 5 for $5 down at Target” or something to that effect. That way, the child begins to realize that prices aren’t the same everywhere and then can make up his mind – 4 cars now or 5 cars later?
I think young children benefit simply from having a bit more information added to their thought process.