Although your child may not yet be in the world of mortgages, taxes and bills, that doesn’t mean they shouldn’t understand money! If you teach children to budget and be money smart from a young age, you will set them up for life. In this article, we will explore some different ways you can accomplish this.
Sometimes children do think that money grows on trees. In a world where money is often online or cashless, it may be hard for a child to grasp the concept. If you simply pay-wave, they may view money as the plastic card that is a credit card.
Visiting the ATM
A good way to approach this is to visit an ATM and withdraw some money. Show your child the note and explain that this is what money looks like. Let them know that you have earned this through your hard work.
Use the cash you received from the ATM to pay for something, such as groceries. This will show your child how the transfer of money operates so that they can form a real-life basis and understanding of money. They will understand that it is not invisible.
Another great way to introduce your child to money is to give them some pocket money each month. Talk about this with them, deciding on a set figure. Try not to go above this figure as this will defeat the purpose of the lesson. Explain to them that this is their money, which they can spend as they wish. Give them some ideas on how to spend it, too.
Suggest to them that they save some of it. This can be done by putting it in a piggybank or opening up a bank account, depending on their age. Let them know that saving doesn’t mean never spending – it means spending wisely. Also, suggest to them that they may use their savings later on for something more expensive perhaps.
By introducing them to saving, they will treat money with respect and may share this concept with other children in their day care.
Giving them pocket money will also teach them how to be patient. If they do not have enough money to buy a toy one month, they can wait until the next month to purchase it. This will also help them understand the difference between “need” and “want” – some purchases are necessary, whilst others are things we may want but not necessarily need.
A good way to encourage emotional development, whilst also teaching your child about money, is to bring up the subject of donating to them. Perhaps, every few months, they could donate some money to a foundation of their choice. Being smart about money and open-hearted will help them understand kindness while also letting them know that sharing really is caring.
Contact ToBeMe for Your Child’s Early Education
If you’d like help teaching your children about the value of money or other ideas such as respect and honesty, consider enrolling your child in one of our two ToBeMe early learning centres, Burwood and Five Dock.