Should kids who are still learning how to count be introduced to the grown-up world of money management?
Absolutely. It’s never too early to start teaching your children about money and the importance of financial responsibility.
"It's actually easy to teach kids about money," according to “Kids and Money: Giving Them the Savvy to Succeed Financially” author Jayne A. Pearl. "Turn your day-to-day activities into learning experiences."
Parents.com caught up with Pearl and other experts to develop an age-by-age guide for parents, outlining fun, simple ways to introduce even the youngest learners to financial education.
“Trips to the bank, store or the ATM, for instance, can be a perfect opening for a discussion about your values and how you use money,” suggested Parents.com writer Anna Attkisson. “When children are very young, you can work money concepts into your child's imaginary games, like playing pretend store or restaurant.”
Teaching financial education to preschoolers is a great way to bring in math, social studies, art, language arts and science lessons. Here’s a roundup of ideas from contributors to Parents.com:
- Count coins with them. They’ll learn how to recognize penny, dimes, nickels and quarters by playing coin identification games. Yale University senior research scientist Dorothy Singer pointed out many 2- and 3-year-olds will think a nickel is worth more than a dime because of its size, so you can take the opportunity to talk about the value of money.
- Play store. Young learners have vivid imaginations, and setting up a pretend grocery store in your home is an interactive way to begin to teach them about the basics of commerce. Let your kids “shop” for grocery items from your panty and pay for them using real currency or play money. You can serve as the cashier to help out with money-counting.
- Clip coupons. Older preschoolers will be ready to talk about ways to save money. Neale S. Godfrey, chairwoman and founder of the Children's Financial Network, recommended having your kids help clip coupons before you head out shopping together.
Early financial education is important because new research suggests that children as young as 3 years old can grasp financial concepts like saving and spending. In addition, a report by researchers at the University of Cambridge commissioned by the United Kingdom’s Money Advice Service revealed that kids’ money habits are formed by age 7.
In an interview with Beth Kobliner, author of The New York Times best-seller “Get a Financial Life,” and a member of the President’s Advisory Council on Financial Capability, Forbes contributor Laura Shin enumerated the most-important financial lessons for kids of every age.
And what’s the chief lesson for kids ages 3-5, according to Kobliner? You may have to wait to buy something you want.
“This is a hard concept for people to learn of all ages,” says Kobliner. "However, the ability to delay gratification can also predict how successful one will be as a grown-up. Kids at this age need to learn that if they really want something, they should wait and save to buy it.”
You can reinforce this message by practicing the lost art of “piggy bank savings” with your kids. By teaching them to save, they’ll learn the value of money and how to distinguish between wants and needs. Plus, you’ll be able teach kids to give first by talking about the importance of sharing the abundance of what they have.
And when they’re ready to move their money out of a piggy bank, AdelFi offers Start Young Saving and Spending Accounts for kids aged 0-17. These accounts provide full-featured digital banking for kids, complete with parental controls, limits and monitoring. Learn more here about using these accounts to help introduce your preschooler to money and banking.