It is unfortunate that our educational systems do not focus as intently as they should on teaching children the value of earning and spending money. Fortunately, as parents, we can help our children understand the importance of investing which will prepare them to develop money management skills as they grow and develop.
There is no specific age in which your child should be taught about money. Once they have a basic concept of numbers and counting, you can begin to teach them the significance of currency and how to count coins. Do not expect a 3 year old child to learn how to properly count out change, but early exposure to these concepts will lay a foundation that will benefit them later on when it comes to understanding the value of money.
As they age, you can begin to explain the value of saving money, how important it is and how it will impact their life. Do not hesitate to show them pay stubs, bills and receipts to help them visualize money coming in and money going out. You can help them further their comprehension of this concept by establishing an allowance.
The central idea of allowance is to have your child work or display positive behaviors in order to receive a reward – in this case, money. Some may argue that children should not be paid for tasks they are responsible for completing (clean their rooms, feed the pets, etc.) but allowing them to earn for accomplishing chores will better prepare them for the workforce later in life. Chores should be monetized based on whether they are expected chores, like the examples above, special chores (such as dusting the house or mopping the floors) or difficult ones (mowing the lawn or washing the car, for example).
Once a system has been established, have your child set spending goals for the earned money. Take them to stores or look online to demonstrate the value of desirable items – a small toy may not take much time to save for but a video game or movie may require more efforts in saving.
Children tend to be visual learners, so allowing them to see their savings will motivate them to continue. Use a glass jar to store their allowance so they can track their progress. You can even create charts or graphs to show how close they are to achieving their goals.
Learning the value of money is not a sit-down and listen lesson – it’s a lifelong one that should be taught at every opportunity. By relating the value of money to everyday life, even from a young age, you are exposing your child to vital knowledge that will benefit them throughout their lifetime. Be patient and guide them through this knowledge.