According to a study at the University of Cambridge, children form their money habits as early as seven years old! So, it is never too early to start teaching your preschooler money skills. Not only is it a basic life skill they will need, but it will also lay the foundation for future math skills. Here are a few ideas to get you going with early money skills.
The Concept of Money
Start with coins. Teach them the value of each coin and begin saving them up in a piggy bank. In today’s marketplace, not everyone pays with cash all of the time, however. Explain to your preschooler what you are doing when you write a check, pay with a debit or credit card, or use a mobile pay app. Concrete bills and coins are easier to understand than abstract swipes or money transferred through apps, but children need to understand that you have to have money in the bank to be able to use those cashless options. When you are shopping, let your preschooler pay with cash sometimes to give them real life experience.
Money Skills
Preschoolers learn best through fun, hands-on activities. First, you can role play by setting up a pretend store or restaurant, setting prices, and then purchasing or ordering things. This can reinforce the types of money and their values as well as budgeting. Secondly, it is important for children to learn that money is earned through work. Let them do extra chores, set up a lemonade stand, or find ways to earn money.
Good Money Habits
Once children begin to understand some basics about money and how it is earned, they need to begin to develop good money habits. You can decide what system works best for your child, but having three different jars with “Give,” “Save,” and “Spend” on them is a good example. When your child is given or earns money, you can decide together how much they will give to a charity or church, how much they will save, and how much they will spend. It is easy for preschoolers to want to spend all of their money right away. This will help them practice discipline with money, save up for bigger items, and also be generous.
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