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Learning money skills is an important life skill. When is the appropriate time to begin introducing and teaching money skills? It might be sooner than you realize. Preschool is the perfect age to begin teaching early money skills.
Starting with the Basics
The President’s Advisory Council on Financial Capability says by age five your preschooler should know the following four things to be on track to living a “financially smart” life: 1. You need money to buy things. 2. You earn money by working. 3. You may have to wait before you can buy something you want. 4. There’s a difference between things you want and things you need. If learning early money skills is this important, how do we go about teaching our preschoolers?
How to Practice
A good place to begin is to decide if your family will use an allowance system, a system that pays for jobs done, or a combination of both. Using only an allowance system possibly will not teach that money is earned by working. As the preschooler brings in her money, it is important to teach her to divide it into saving, spending, and giving. There are piggy banks that actually have separate compartments for each category.
Prioritizing
To teach the difference between wants and needs, if you have a pet, you could take your preschooler to the local pet store. When there, have your preschooler choose things that your pet needs. Next, work through things that would be considered wants. By using a pet, it teaches the lesson but removes the emotional attachment a preschooler can feel concerning what he views as needs and wants.
Resources
There are numerous books that are available to help teach a variety of money skills. In Curious George Saves His Pennies, Curious George introduces savings. Alexander, Who Used to Be Rich Last Sunday covers frivolous spending, as Alexander makes some poor purchases. In Sheep in a Shop, five sheep head to the store to purchase a birthday gift only to learn they do not have enough money. The Berenstain Bears’ Trouble with Money can take your preschooler along with Brother and Sister Bear as they work with entrepreneurship.
Even someone as young as a preschooler is able to learn money skills. Teaching preschoolers early money skills can help prepare them for a financially smart life. By taking the time to instill these skills, you are investing in your preschooler’s future.
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