Personal finances can be one of the most confusing things to teach a child. My five year old struggles a bit with the concept of money, and so I’ve been doing some thinking about how to approach this lately. Teaching young children about money can go a long way in preparing them for the future. Children learn and mimic their parents’ behavior. Thus, if you talk to your child about money when they are young, and set an example for them as they grow, they will be that much more aware and fiscally responsible as adults.
Here are some suggestions on what to tell your five-year-old about money:
1. Although it may be a cliché, you can still tell them that “money doesn’t grow on trees.” Explain how mommy and daddy make money.
2. Sit your child down, show them coins and dollars of different denominations and explain what they are.
3. Explain the importance of saving money.
4. Explain how money is used to purchase different things.
5. Talk to your child about banks and what they are for.
6. Explain how a budget works and why it is important.
7. Talk about how saving money for something you really want is important.
8. On your next trip to the supermarket, show your child the different prices of items.
9. Tell your child that once you spend money for groceries, you have to save money for the following week so you can buy more groceries.
10. If you attend Sunday service, explain to your child what a donation is and why it is important.
While these are just some items you can discuss with your child, there may be many questions he or she will ask. The child may not be able to absorb all this information at once, so you may wish to discuss one topic a week.
Another important aspect in teaching children about money is to utilize a visual component such as showing the child different coins, taking the child to the supermarket and pointing out different prices, having your child watch you as you balance your checkbook, or figuring out the household budget for the month.
It may seem foreign to the child at first, but the more you utilize money in repetitious acts with your child, the more he or she will come to understand its meaning.
Buy a piggy bank for your child and give him or her loose change at the end of the day. Ask the child to identify the coins as he or she puts them into the bank. This is a fun way for children to learn about money and how important it will become in their later lives.
Children are such precious little beings. They add that special something to our lives. But when they start
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