Tuesday, September 14, 2010

Dollars and Sense: Teaching Kids about Money


I grew up with a banker father, so I had a savings account before I could even walk. As an adult, I’m so grateful that my father took the time to carefully teach me about money, budgeting, and saving. Especially with the credit crisis/recession/housing bust, it’s more important than ever to make sure our kids know the value of money and the importance of handling it wisely.

Here are a few ideas to get the money ball rolling in your house:

  1. Allowance- This is one of the easiest ways to teach even the youngest children about money and budgeting. Giving preschoolers a monthly allowance can also be a calendar lesson (August money, September money etc.). Help your child make a money plan for the month by finding items that are within his budget. Print/Cut out pictures of the items, paste to a sheet of paper, and hang on the wall as a reminder of either a. What he has to look forward to spending his next month’s money on or b. Why he doesn’t have any more money to spend again until next month.

  1. Use a variety of currency- When giving your child her allowance or even when paying at the store, expose your child to the various paper and coin monies we use. Though very young children will not be able to understand the monetary value of each piece, they will begin to put a ‘face with a name,’ so to speak, by labeling each piece of currency.

  1. Make a wish list- Help your child compile a list of different toys/games/things he wants. Next to the item, list the price and assign a priority (For example: really want, would be nice to have, to keep in mind). This will help your child evaluate when he will be able to afford each item as well as how important each item is to him.

  1. The Bank of Mom & Dad- A friend of mine does this and I think it’s genius. Here’s how it works: The Bank of Mom & Dad pays 100% interest, but all deposits must remain in the bank for a month (or a week, two weeks, whatever you choose) to collect said interest. After that period of time, the child then gets the original deposit plus the 100% interest, thus doubling his initial amount! (Caution: Do this only if you are actually willing/able to pay out at the end of the period!)

Hopefully, armed with these fun ideas, you can begin to help your preschooler learn about and explore the exciting world of money (I know I love money)- Cha-ching!

How do you help your child learn about money and saving?


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