by Erica Sandberg, Consumer Economics Expert and Author of Expecting Money: the Essential Financial Plan for New and Growing Families
Encouraging kids to learn about money is such a great way to help them build important skills like problem solving, critical thinking, and more.
That’s why I was so excited to host a Facebook Live Dollars & Sense session for Learning Resources. Since I didn’t have time to answer all the wonderful questions during the live session, I wanted to take a moment to address a few of them here. Check them out below…
Q: Should you teach kids about investing too? Or is that subject too complex?
A: Absolutely, and you can do so in a really simple and powerful way. Using the play money, have your child hand you a bill. Explain that the longer you have it, the more he or she will get back in return. You can chat a little about risk (like, “don’t just give it to anyone, you have to be confidant the money holder will give it back”) but that’s advanced material.
Q: My kids think everything is ‘free’ with a credit card—how can I help them understand the value of the things we buy?
A: Good question! All you have to do is make a short statement when you use the card. “I’m borrowing money from the bank to pay for this and I have to pay them back. If I don’t send everything I spent in 30 days, the bank will add on a fee which means extra money out the door—and I don’t want that!”
Q: When is the best time for savings?
A: The best age is three or four because kids are observing you use money. The best time is when you’re actively making deposits at the real ATM. Then they can do it themselves with the toy ATM. Outside of that, grab a box or piggy bank and throw in money together whenever you have spare change.
Q: Do you think young kids should get an allowance?
A: A ‘real” allowance is best for children who are ten and up. Kids ages 3 to 7 are still in the counting and early concept stage. They need to be taught what money is and how it can best be used. A little practice paying for things is smart, though.
Talk about what you’re doing with money in positive ways. “I’m going to work because I like it and the company pays me for what I do. With what I earn, I pay for all kinds of fun and important things!” It’s a great set up.
Then act it out when you’re with your child. Enjoy yourselves. Laugh. Kids love absurdity. Say, “I’m selling this broccoli for a million dollars,” and ask if that makes sense. You will be teaching so many important money skills just by communicating and playing. Have fun with it!
Did you like this post? Let us know at firstname.lastname@example.org, and don’t forget to check out Erica’s recent post: Dollars and Sense! Teaching Kids Skills That Pay The Bills.
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