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Last Updated on 2015-06-25 by Kassandra
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Hey guys! Kassandra here with Prosperous Heart and today I learned something from the National Wealth Center that I felt a lot of my friends with children could benefit from, so I wanted to share with you these 6 Techniques to Educate Your Small Children About Money.
One of the longest dreams I have had is to be able to spend time with late middle school through high school children and teach them about money – including how to break free of the chains of poverty that can sometimes enslave a family for generations …
But did you know that it all first starts from your mind?
You’ve got to get your MIND right before the rest will fall into place.
And that’s just one of the many reasons why children can benefit from financial education at an early age.
A study from the University of Cambridge, “Habit Formation and Learning in Young Children,” found that money habits are formed by age 7.
Researchers share it’s important to start basic finance education by age 3.
Children pick up money habits quickly, so giving them the right direction is crucial.
6 Techniques to Educate Your Kids About Money
1. Start with basic currency literacy.
A study from Yale University found that children can recognize and remember coins by the age of 3.
Educate your children about the different coins and dollar bills. Consider teaching them about foreign currencies during vacations.
This will expand their minds and help them learn more about the countries you’re visiting.
2. Create money jars.
Money jars are a fun and easy way to educate your child. You can create three types of money jars. Jars for spending, saving, and giving cover the basic lessons of understanding how to use money.
Teach your children how to use the three jars and why they’re important.
Use the jars to separate money after birthday gifts or allowance payments. Children will learn how to save for the future.
Use the giving jar for charities. Children will learn about giving and understand how they can help others with their money. They can donate the money to local animal shelters or food pantries.
3. Use coupons.
Coupons can provide an important lesson on saving.
Cut out coupons with help from your children and leave them in charge of handling the papers at the store.
According to the Children’s Financial Network, kids as young as 5 can benefit from learning how to use coupons in a store. They will see how to save money and make wiser shopping decisions.
4. Set a money goal.
Children can set a money goal to purchase a favorite toy or other item.
Money goals are an easy way to teach children financial patience. They also provide a lesson on how to save money.
It’s important to set realistic goals, so children will be motivated to stay on a savings plan. If the toy they want is expensive, it can take a while to reach their goals.
Will they stay interested?
Picking smaller and less expensive targets is better.
5. Go shopping.
Let your children use their spend jars at the store to make purchases.
Shopping provides an easy lesson setting. How will your children spend their money? Will they use their entire jars at one store or spread them out over many shopping trips?
An outing to the local toy store also gives you the chance to discuss comparison shopping. Point out different prices on similar items and teach your children about finding inexpensive options.
Evaluating the results of the shopping trip will help them understand their choices.
How will they restock their spend jars?
6. Use yard sales.
Yard sales offer another way to educate children about finances.
Yard sales can help you clean out your children’s rooms and teach them about money at the same time.
Ask your children if they want to participate in the yard sale by selling their old toys or clothes. Help them select items they no longer use and find appropriate prices for them. They can use the experience to refill their money jars.
Older children can help sell items at the sale. They can keep track of change and watch customers. This is also a valuable opportunity to learn about price negotiations with customers.
Financial education can begin before your children are in school. It’s important for them to understand basic money rules and form the right habits.
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A lot of these things my parents taught me as a child. They wanted me to be accountable for my finances. They also had the rule of no allowance unless all my chores were completed for the week which really taught me that earning money is only done by working for it and you should not depend on others to take care of you.
Thank you so much for stopping by, Kate – I really appreciate it! Your parents did well to teach you those things growing up … Their teachings are definitely reflected in who you are today. Love and miss you! 🙂