Photo: Scott Hodge
Everyone knows that first impressions are important. That’s why we dress up for job interviews, first dates and the first day of school. But it isn’t just other people we judge at first meetings. Our early experiences with intangible concepts shape our perceptions for a lifetime. A child who believes themselves to be bad at math or reading will often reach adulthood still believing it, even if it isn’t true.
Well, money is, for better or for worse, one of those things people learn about early in life. If a child learns the wrong things and gets the wrong impression, a multitude of adult financial woes can be the result. Parents, here are some money concepts to teach your young children, and tips on how to make them work in your family.
Don’t lecture
The best way to teach young children about such huge concepts is not to sit them down and give them a big speech. These sorts of things work best when dealt with in small doses over time. Let them come up naturally in day to day conversations and interactions. Then your children will remember them better and be more likely to ask questions if they’re confused.
Talk about your budget
If you have a budget, talk about it. This is definitely a concept to bring up at the store while you shop. For example, if your child is begging you for cookies, you can explain that you have twenty dollars to spend at the store today, and you must buy milk, eggs, bread and chicken for dinner. This will help your child understand that your wallet is not a bottomless well of dollar bills.
Plastic is money
One very common misconception in young children is that credit and debit cards are not actually money. Toddlers and preschoolers especially often see credit cards as a free pass to buy anything from the store; they don’t see money change hands, so they don’t think it has happened. Tell them that when you use your card, the grocery store (or wherever) takes that much of your money from the bank. Be prepared to say this many times, and when you think they’ve got it, ask them to tell you how the card works.
Give an allowance
Having any allowance will teach your child about money. The disclaimer: it will not happen instantly. In fact, it could take years. For the first months that I had an allowance as a child, I spent it immediately. But after a few weeks I got tired of buying cheap, little things and started to put it away for a few weeks to buy a slightly larger cheap thing. Eventually, there were more expensive things I wanted to save for, and I learned how to save and wait. That basic cycle is what most kids go through. But it’s not going to happen overnight. It is a learning process.
Don’t tie allowance to chores
A quick warning about linking the child’s allowance to doing their regular household chores. While the theory sounds good (child works and earns money), in practice it often backfires. Children begin to feel entitled to payment every time they lift a finger around the house. Or when they get older and start to work a job outside the house, they think they can stop doing chores.
Give extra jobs
On the other hand, there is nothing wrong with offering an extra dollar or two for doing unusual chores that go above and beyond the child’s day-to-day requirements. Especially if your child is trying to save up for a large purchase that means a lot to them, you can help him or her reach their goal and give them the satisfaction of having worked and saved for something they wanted. That is a powerful lesson at any age.
These concepts and lessons will give your child the basic tools they need to understand money and learn the skills to save and spend wisely. Then, as they grow older, you’ll have a solid foundation to build knowledge of more complex financial matters. Now, check out the next level of learning for your preteen or teenager.
