How to Teach Children About Money?

PRESCHOOL PERIOD (Ages 3-6):

Preschoolers often struggle with abstract concepts. So, focusing on hands-on experiences and play is the most effective way to introduce them to the concept of money.

They Don't Grasp the Value of Amounts

At this age, kids can't fully understand the value of different amounts of money. To teach them about money, we need to consider their developmental stage. For preschoolers, it's all about understanding what money is used for. Simply grasping that you need money to buy a toy is enough.

During playtime, emphasize that money is a tool for exchange. A fantastic way to help them understand this is through "shopping games"! Show them the prices of different items, so they can learn practically how money is used. For instance, playing "cashier" with toy money is both fun and educational.

Don't Say "I Don't Have Money"

Avoid telling your child "I don't have money" at all costs. This can create a sense of scarcity and deprivation. Instead, try these positive alternatives:

"We don't have room in our budget for that right now."

"We need to save a bit more to buy that."

"Instead of buying that, maybe we could do something different."

Practical Examples

Let them touch and examine real money. This helps them get a sense of what it looks like.

You can also illustrate the "money doesn't grow on trees" concept with simple chores. Introduce the idea of "rewards for tasks" by giving them small jobs like tidying up toys or setting the table. Use phrases like, "Thanks for helping, here's a little reward," to highlight that money is earned through effort.

Guiding them during shopping trips is essential. Take them to the store and explain the difference between "needs" (food) and "wants" (toys). Encourage them to think with questions like, "Do we really need this toy, or do we just like it?" Visual aids like a transparent piggy bank can show them how savings grow, and you can set savings goals together.