How To Teach Preschoolers About Money
June 25, 2024
Is a child ever too young to learn about finances? It's possible they aren't. In fact, kids in the three to five-year-old age range may be at the perfect stage to acquire basic money skills. Consider these best practices for how to teach preschoolers about money. You may be surprised at the opportunities you already have to grow a strong financial foundation.
1. Read Books That Teach Kids About Money
There is no shortage of literature on the topic of money. Two such books feature the Berenstain Bears™ as they navigate their first experiences with cash. "Trouble with Money" and "Dollars and Sense" each offer a simple story of the bear cubs with relatable lessons that kids can appreciate at any age.
The book doesn't have to be all about money to get a child's attention. Books that feature shopping, recieving birthday money, or working a job as part of the story can all be conversation starters around money lessons. Reading to kids has a value all its own, and being able to talk about money is just a bonus.
2. Count Money With Your Preschooler
As soon as young children are past the stage of putting objects in their mouths, they may be ready to handle real money. You might give them one of each coin to touch and examine, then explain how they differ in size, color, and weight. Put several of the same coin kind in a line, and "count" the change. Not only does this introduce kids to each of the coins and their value, but it helps build math skills, too. Counting five nickels, for example, gets kids skip-counting by fives, which will come in handy as they age.
You can replicate these activities with paper money, as well.
3. Use a Piggy Bank for Coins
Kids may appreciate buying things from a very early age. Little children may even ask for candy, a toy, or a video when shopping in the store. Rather than shutting the conversation down completely, use their desire to buy things as motivation for saving.
Parents may even want to implement a "spend, share, save" plan for their youngsters, with goals as small as just a few dollars. Then, when the child receives money for helping around the house or as a birthday gift, they can see their contributions grow until it’s time to cash out each bucket.
The piggy bank is a great visual representation of that goal. For added excitement, buy a piggy bank with clear walls so kids can monitor their progress. When the bank gets full, consider putting the balance into a savings account.
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4. Watch Your Language
Parents are the ultimate role models, meaning what they say matters. When preschoolers hear a trusted adult talk about money, they often believe it. Be careful with how you talk about money, including earning it and spending it.
If a child hears a parent complain about having to work to make money to pay bills, the child may develop an unhealthy association with employment or taking care of financial responsibilities. Yes, there will be many years and opportunities to experience finance in a healthy way, but kids are quick learners. It can be hard to undo attitudes learned early in life.
Instead, focus on what you are grateful for and how you use money to further your goals and live out values. Statements like "I can't believe I have to go do work today" or "food is so expensive!" may make a child fear grownup responsibilities. Phrases like, "I'm tired but grateful to have a job today" and "It looks like we'll need to focus on the grocery store sales to make the most of our money" seem less intimidating to a child.
5. Answer Money Questions
Kids often use phrases like "why?" or "how" in conversation. In fact, it may seem like all you do as a parent is answer their questions. Still, leaving the door open for money-related questions may be a good way to teach as you go.
The quiet or shy child may not be as bold with questions and could use some coaching to get started. At a grocery store outing, a parent may ask, "What foods do you think might be nutritious but also a good price?" or "How do you think credit cards work?"
While very young, kids at this age can understand the basics, such as money moving from one person (you) to another (the grocery store clerk). They can grasp the idea of credit (borrowing money) and getting change at the store from a purchase.
Kids may come up with silly or even inappropriate questions, but this is OK, too. Parents should take the time to explain that cats don't use money — and provide other practical responses to kids’ endless and imaginative inquiries.
Why it Doesn't Pay to Wait to Introduce Money Lessons
It may be tempting to postpone money conversations until later in life. After all, what could a three-year-old possibly need to know about finances?
But the truth is that kids grow up very fast. Even if you think they may not be ready for heavy conversations about the Federal Reserve or this year's income taxes, there's a risk of putting things off until it's too late.
As soon as kids can start to count, recognize the differences in shapes and colors, and sit attentively to hear a story, they are at a great age to build a very basic knowledge of money. They may not remember much of what you tell them, but there's a value because you're establishing trust. You're saying, "We can talk about money, even though it may not seem important, so you know we can talk about it later, too."
Parents who broach the money subject when children are young may be more likely to do so when necessary. If you need help teaching your preschooler about money, reach out to your local Centier bank representative. They have resources and teaching tools available for even the smallest future customers.
