Teaching Children About Money
Money Activities to Help Children Learn to Save and Spend Responsibly
Oct 29, 2006
Children realize very early in life that money has value. They understand that getting a toy means Mom or Dad has to spend money, or that they need to save money to buy something they want. They also know that doing chores or jobs can earn them money to save or spend. They are also exposed to Mom and Dad working a job to earn money to provide the house they live in, the food they eat and the clothes they wear.
In a world where money is everywhere, it is important to teach kids to view money responsibly. This is not easy, especially with a retail driven society and the more frequent use of "buy now, pay later" for expensive items like TVs, furniture, and outdoor equipment. There is no doubt that today, credit is as much a part of the money world as actual paper and coins. Can children understand the difference between money and credit? And how do we help them view money responsibly? Here are some ways to help them grow up with a responsible view of money.
At home:
- Provide younger children with props, such as play money, a cash register and items suitable for using to play "store."
- Provide children with an opportunity to earn money. Designate some chores as simply a part of domestic life, and offer an allowance or a chance to earn money for other activities. This way, children see that not all chores carry a money reward with them, rather the reward is a job well done. (Don't forget to praise!)
- Allow children to open a bank account and make regular deposits. If needed, set a limit on how much can be withdrawn so he or she can learn that just because there is money in the bank, that doesn't mean it should be spent.
- Introduce children to the concept of borrowing. If a child wants a loan, make an agreement that it will be paid back within a certain amount of time. This helps children to understand the concept of credit, and they begin to understand that borrowing the money doesn't mean that it is free.
- Talk about money as a family. Children will understand how to use and view money better if they are included in some discussions or decisions. If you buy something on credit, explain that you are still responsible for paying the full price. Let children know why you can't or won't buy certain items, or that you are saving up for a vacation, car, etc.
At school:
- Have children earn "classroom cash" for jobs or helpfulness. These can be saved and spent on free time, extra recess, lunch with the teacher, etc.
- Provide young children the opportunity to count and handle coins. They can practice counting by five's and ten's with nickels and dimes, make coin rubbings to get familiar with the size and look of different coins, and have a class collection of state quarters or different coins.
- Older children can learn to determine if they have enough money to buy items of different prices, either through role playing or using a money game (commercial or teacher-made!) Teachers can have a variety of priced items, and groups of students can be given an amount of money. They can determine how many of the items they can purchase with their money.
- Introduce children to the idea that television commercials are designed to sell products. Have children view several commercials and have them determine (individually or as a class) what would be the best buy for their money. Have them think about the usefulness/healthfulness of the product, price and need/want for the product.
- Discuss and define money terms. Save, spend, earn, and borrow are all important money terms that children can understand and use.
These ideas and activities can help children learn basic ideas about money. Children who learn early what money is, how to use it, and how to talk about it will grow up to be adults who are better equipped to use money responsibly.
