How to Teach Young Kids About Money

Don’t wait until your children grow up to be a teenage and we start to teach them about money. We can teach the schooling kids about money as young as they are in primary one or year 1. At primary one, they learn the basic math and I see the math book that incorporates the value of money in terms of addition and subtraction. Children are observers and they learn fast from observing their parents. Here are 8 simple ways to teach the young kids, preschoolers and schooling kids about money in plain words or casual conversation.

What is money?
Money is used for a transaction. We buy things, we need to pay with money and the sellers get the money because they sell things. Show them the real money and its value. We can show the real money while teaching math to them when the topic is about money.

Where does the money come from?
Kids know that parents are going to work. We need to explain in simple words that we go to work and we earn money. That’s how the money comes from.

What is a bank?
When the parents withdraw money from ATM machine, the kids will notice that we insert the card and voila, we get the money from the machine. The kids will have the opinion, as long as we have the card, insert the card to the machine and we will get the money. That isn’t simple. We need to work and earn money and keep the money at the bank, not at home. The bank will give us a card, called ATM card to withdraw the money from our account. We can withdraw the money not more than we have in our account.

How about credit card?
When we go shopping, we mostly use credit card right? Credit card is another form of payment. Instead of using money, we use credit card. When we use credit card, we have to pay back to the bank with our money. So, we have to be careful when we use the credit card.

Learn the value of money during shopping
When parents take along their kids for shopping, show them the value of money. Let them observe that each item has a different price and ask them to compare the prices to judge which one is cheap and which one is expensive. For example: a cone of McDonald ice cream costs $1.05 and a cone of Baskin Robbins ice cream costs $6 plus.

Teach preschoolers and schooling kids the difference between a need and a wish
Parents may experience that their preschooler points at things that he wants you to buy. When we give in his need, he will repeat again the next time. We decide not to take him for shopping or we say: We don’t have money and he will cry. This is common and it may happen to any parents. We should take a different approach before we go shopping. Teach him what he needs and what he wishes. For example: stationery is what he needs, toys are what he wishes for. Kids can buy what he needs only. Parents will give toys as a present for special occasions on birthdays or during school holidays or festivals.

The magic of saving and investment
Parents, take your kids to the bank to open an account for them. Tell them that they need to keep the money in the bank, the bank will reward them with interest  if they don’t withdraw the money. When your kids are old enough, we can tell them about the magic of compound interest and investment.

Play the game about money for kids
We can teach them the value of money while we play the game. Monopoly is one example. When we have no money, we can’t buy the land, the company and the property. Sometimes we’re in debt, it means we have to pay back to the bank when we have the money.

It is important to teach preschoolers and schooling kids not to compare what they have to what other kids have.