Being able to manage money is one of the most important life skills that anyone can acquire – even at a young age. Attitudes and habits towards money can be developed early-on in life. This is why it’s a good idea to start teaching your preschoolers good financial habits as early as possible. Here are some tips to help teach your child about the purpose and value of money.
Money as a Currency
Young children can learn that money is something you exchange for something else. To demonstrate this, you can give your child a dollar or two and allow them to select a piece of candy or fruit from the store. This will help them understand the role of money in everyday life.
Preschoolers and young children also love to play “store” using play money, so help your child set up a small “store” and allow “customers” to purchase items using play money. Your child will learn that money is used to acquire different items, and that valuable items cost more money.
When your child learns how to count, you can begin explaining to them the value of different coins and their relationships with each other. Help them understand that five pennies are worth as much as one nickel, and two nickels are worth as much as one dime. This will help them comprehend that all coins are valuable, but some are worth more than others.
Giving your child a piggybank is also a good way to help them understand the value of coins. Allow them to collect coins in their piggybank and pick a time to empty it out and count the coins inside. They will enjoy sorting the different coins into piles and adding up the value of each pile.
Coupons are a practical way to save a little extra money on an item. Instead of recycling the newspapers and magazines that arrive in the mail full of coupons, use them as learning tools for your child. Since most coupons include pictures of the items, go through a coupon book with your child and have them help you select which coupons will be useful for your family. Clip these coupons and put them in an envelope.
The next time you go to the store, allow your child to carry the coupon envelope. If he is old enough, he can help you locate the items on the coupons. This is a good lesson on the importance of discounts and choosing the best deals.
The Importance of Saving Money
Perhaps the most important habit for a child to learn is how important it is to save money. A good way to reinforce this is by setting up a savings account for your child. Children will be very excited and feel like responsible adults once they have their own bank account. If your child receives an allowance, encourage your child to deposit a percentage of their allowance into their savings account.
When they get a little older, explain to them that when they put money into a savings account, the bank pays them interest every month, so they are earning even more money. To further reinforce the importance of saving money, consider matching whatever amount your child puts into their account. This will inspire them to use their savings account even more frequently.
At Carpe Diem Private Preschool, our programs are based on the best knowledge of education theory and research. We believe that preschoolers learn number concepts best, for example, by manipulating and counting real objects, not by completing workbook pages. We also teach self-control, cooperation, and responsibility, which are all great qualities to have when learning the value of and managing money.