When your child graduates toddlerhood for preschool, they will likely be old enough to understand abstract ideas. You can now begin teaching them deeper concepts about money. A great place to start is teaching your child that money doesn’t grow on trees.
In a world where you can buy almost anything with plastic, by scanning a phone, or even online, children can be under the impression that money comes from an infinite source. It’s crucial for children to learn that money is limited, must be earned, and that you can only spend the money you have.
Kids in this age range won’t do well with lectures. Instead, let them learn through experience and hands-on observation. Here are some ways to bring this lesson home:
• Start an allowance system. Preschoolers are old enough to begin receiving a small weekly allowance. You can use the three-jar system, in which you label three jars as Spend, Save, and Give and then have your child divide their allowance between the jars accordingly. For very young children who can’t yet read, be sure to mark the jars with pictures or colored labels in addition to the written word.
• Set up a mini-budget when shopping with your preschooler. A 4-year-old is too young to understand a monthly budget, but on small shopping trips, you can let them know how much money you have to spend, and let them help you stick to that amount. PAGE 10 • Offer extra money for extra chores. Once your child grows accustomed to having their own money, they may develop a taste for more. Feed this instinct and teach them their first lesson about earning money by offering a few extra dollars for completing extra chores.
Use these conversation starters to help bring the lesson home:
• How do mom and dad get the money they need to buy things?
• Does working harder always mean making more money?
• How would the world be different if money actually grew on trees?