It’s not too early to start teaching preschoolers about money! Discover 12 ways to make learning about money fun, interesting, and impactful, even for young kids.
It’s the taboo topic, even among adults. We’re not supposed to mention incomes, debts, or how much we spend on purchases. We size each other up based on our perceived worth.
Yet so much about money pervades our lives, from the opportunities we have and the values we shape. It’s what determines whether we save for college or stay home with the kids or not.
Like many people, I didn’t get a well-rounded education about money, certainly not from school. Sure, we learned how to write checks and filled out worksheets about coins. And yes, I had a vague idea of what my parents did for a living.
But I was also fortunate: I graduated college with no student loans, paid off the balances on my credit card, and entered adulthood with no debt.
That said, I also didn’t save much. I assumed I should spend the money I earned from my first real job on things I could now afford. You know, adult things: Furniture (“No more hand me downs!” I would say). Dinners. Going out. I even confessed that I now “deserved” a brand new car—until a cousin knocked some sense into my head.
I didn’t save aggressively when I had the opportunity to. (And when I didn’t have child-related costs depleting my budget.)
Only through my post-college years did I get into personal finance and learning about money. I discovered smart ways to save, invest, and put money to good use. More recently, I learned about unconventional ways of earning besides “getting a job” (like blogging!).
Teaching preschoolers about money
As a mom, I want to pass my passion for personal finance and money onto my kids. I’d like them to balance smart saving with intentional spending, to invest for the future while enjoying what they have. But how do you start? And at what age?
Turns out, this starts younger than you think—in the preschool years.
You can teach kids about money even before they know anything about math and numbers. Before allowances and first jobs.
In fact, teaching preschoolers about money is a fantastic time to introduce them to finance. While money terms are important for adults (IRA! compounding interest!), we can start teaching the behavior and psychology behind money. The “why”s of how we spend, save and earn.
We want to raise kids with clear values about money and use it as a tool to live a life with opportunities. Where they understand the difference between excess and enough and know better than to spend more than they earn.
These 12 ways offer factual lessons taught to your child’s level. They draw on her curiosity about the way the world works, as well as her ability to make everything fun. Best of all, she can apply these lessons to her everyday life.
By starting now, you’re helping her develop a healthy relationship with money. You can raise her to be responsible and generous with money, starting with these 12 ways:
1. Make chores a regular activity
Chores are a fantastic way to introduce the values of hard work, responsibility, and discipline, traits that are just as important when it comes to managing money.
As an adult, you child will turn to these values to make hard decisions, persevere, and stand out above the rest. She might work for a company or start her own. Either way, she will have had the experience of routine responsibilities that may or may not have been pleasant.
And it’s not about paying her to do chores—in fact, I believe kids should do chores simply to contribute to the household, not to earn money. Instead, it’s about drilling down the idea of discipline and doing a job well done.
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2. Encourage your child to wait
Have you ever stood with your child in a long line at the grocery store? If you’re like most parents, you felt a wave of panic thinking how in the world she’s going to behave while waiting for your items to be rung up.
But guess what: all that waiting is actually good for her.
By learning to wait, she’s less likely to give in to impulse buying or quick wins, and instead see the value in waiting for even better results down the line.
She can put aside gift money to save up for a scooter, instead of spending $5 here or $10 there for smaller-priced items she doesn’t even truly want.
Come adulthood, she’ll see the value in setting money aside for retirement. She can also fantastic vacations, all because she’s already learned how to save money.
Now, this doesn’t mean that waiting is pleasant. Far from it. She won’t stop experiencing its discomfort, but will instead learn how to cope with it.
Through waiting, she’ll come up with creative ways to keep herself entertained. She might play with her baby brother or count the items in the cart instead of whining or wishing to hurry up the process.
Here are a few ways to teach her to wait:
- Say “no.” Don’t concede to every request and avoid spoiling your kids.
- Have her wait. If it’s only 30 minutes before dinner time and she wants to eat, have her wait instead of giving him a snack.
- Think about it. If she asks for something and you have no plans to purchase it, say you’ll think about it. Ask her to do the same and wait at least a day to see if she still wants the item.
- Find distractions. Encourage her to find ways to distract herself while waiting. Praise her for behaving well and entertaining herself while waiting in line.
3. Encourage your child to save
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The best time to start a savings account for your child is the minute she starts receiving money for gifts. Take half of that money and stow it in a college savings fund, and take the other half and put it in a savings account.
As she grow and ask for things you’d rather not buy, introduce her to her savings account. Show her that this money is hers to use on purchases she’d like to make.
Should she ask for a big-ticket item you’d rather not buy, tell her to save up for it using her savings account. The extra time needed to make this happen just might convince her that she might not want that item after all.
Saving can even start with a piggy bank.
I’ll admit: I didn’t get my kids a piggy bank until someone gifted my twins with one. These days, I can’t imagine what we’d do without it. Because every time we happen upon loose change or petty cash, they love dropping the money into their bank.
At the end of the year—after Christmas, in fact—we open their piggy bank and have fun sorting the coins into rolls. I then explain that I’ll take these rolls to the bank. Half will go to their college fund, and the other half into their savings in case they want money to spend.
If anything, a piggy bank simply gives your child a place to store coins. She knows exactly where to put her money, and understands that after a certain time, she can use it to spend, save, or give.
Here are several piggy banks that parents love:
4. Count everything
Understanding money starts with basic counting. After all, we can’t know how much money we have if we don’t know how to count and measure it.
Make it a daily habit to count with your child, from simple games like counting Lego pieces to playing math games with beads. And of course, you can always count money, especially if you’re sorting through her piggy bank.
Once she understands basic counting, introduce different ways to count multiple items. For instance, you can arrange pennies in groups of tens, then count by tens to show how many dollars she has.
5. Introduce your child to different coins
By the preschool age, most kids can sort the different coins and understand how much each one is worth. They’ll be able to tell pennies, nickels, dimes, and quarters apart, as well as tell you that dimes are 10 cents and quarters are 25.
They may not be able to add them up just yet, but they’re not too young to learn their differences, both in appearance and worth.
The best way to introduce coins is to simply show your child real coins. Worksheets are fine to supplement, but since most of us have access to coins, seeing and feeling the actual coins is an easier way to learn.
You can also play fun games to introduce coins, like the Money Bags Coin Value Game:
6. Explain how you earn money
I sometimes wonder if kids think “work” is simply where their parents go when they’re apart. After all, we hardly—if ever—take them to our workplaces, so work sounds like this mysterious place we have to go to.
But work can be a fantastic opportunity to share how we—and the world in general—do things to earn money. Your child learns that we offer value, time, and knowledge in exchange for money. Be creative when explaining your job to her level, framing it in ways she can understand.
Better yet, talk about what you love about your work, especially if you truly feel passionate about it. Too many kids are seeing parents trudge to work, painting a negative picture of what it means to contribute to society.
If you don’t love your job, talk about why you love having a job, from the ability to provide for your family, to spending time with your coworkers. And if you don’t work outside the home, talk about how your partner or other family members earn income.
7. Talk about other people’s work
On that note, another fantastic way to show the value in work is to talk to your child about other people’s work. Simple ones to start with are those she already sees, from her pediatrician to her teacher to the firefighters driving the truck.
If you have family and friends with interesting careers, even better. Talk about how your friend is a weather anchor for the morning news, or how her uncle is a mechanic for city buses. Share how your college friend started her own business, and how another illustrates children’s books.
By giving your child a wide scope of careers, she can see how there are different ways to earn money.
8. Describe store and money interactions
I hardly use cash. In fact, the one time a week I do is at our farmers’ market, where many stalls prefer (or sometimes only offer) cash exchanges over credit or debit cards.
But I love that my kids can see the exchange of money for goods every week. It’s harder to understand the process of using money when all they see are our credit cards. Whether we’re buying a $5 coffee or $500 furniture, it all looks the same if we’re only using cards.
Cash, however, makes for a more interactive exchange. We count the money we give the vendor and usually get change in return. I even have my kids give the vendors money, who then like to ask them how much change they should give in return.
Explain the exchange of money for goods or services by describing store interactions. Tell your child you’re giving the vendor $2 so that you can take home four sweet potatoes. Or how you’re paying the restaurant because they cooked and served you food.
At the bank or ATM, explain how you store your money in a bank and once in a while use a card like a key to take some out. She won’t think that banks and ATMs are flush with free cash. Instead, you’re taking your money out to use.
9. Don’t indulge impulse buys
Buying on impulse isn’t an absolute evil—in the past, my husband and I decided on a whim to treat the kids to ice cream after dinner. We didn’t plan to spend that $17.75 at the ice cream store earlier that morning, but the choice to do so gave us a fun experience.
But done too much—especially where temptations run high—can set a bad example for your child. Impulse buys run against the value of saving and planning, two skills she’ll need to be financially successful.
Instead, make a habit of writing a shopping list each time you run an errand. Explain why you’re there (“We’re going to the toy store to buy a gift for your friend’s birthday party“) so you’re both clear on expectations.
Distinguish between “wants” and “needs.” Show the difference between a necessity and a luxury, the everyday and the once-in-a-while. We need to eat lunch, but we don’t need to eat cake. Saying “I need to get a new jacket” would be better said with, “I want to get a new jacket.”
Define family essentials and extras. You may need to spend time together as a family, but an expensive vacation is an extra.
And avoid responding to her requests with “We can’t afford it” or “I don’t have money for that.” Because you can, and you do. Instead, explain that that’s not what you came here to buy, that you’ll think about it, or that you’ll consider putting it on the list for next time.
10. Talk about the purpose of advertising
My kids hardly watch television, and when we do, they don’t see commercials (thanks, Netflix!). I’m glad for it, since advertising can be very confusing to children. According to Common Sense Media:
“At around age 8 kids understand that ads are trying to sell something. Before that, they take ads at face value and assume they’re like any other entertainment — or maybe even real.”
If at all possible, keep your child away from advertising, especially at a young age.
But even then, she’ll still likely run into ads, from television to the Internet to the billboards you drive by every day. Instead of avoiding advertising completely, talk about its purpose.
Ads themselves aren’t rooted in evil—many businesses rely on ads to earn income, after all. But talk about what they are and why they exist. That the kids on the commercial are acting, or that the creator of the ad wants you to buy the product.
You can even point out the techniques they use, such as the upbeat music, flashy graphics, and fancy food styling.
11. Start a college fund
When your child receives money (like through gifts or earning it), have her save some into a college fund. This gets her into the habit of saving a percentage of her income for long-term savings, just as we adults save for retirement.
You might even want to pitch in and match her contributions. For every $1 she saves in their college fund, add an extra $0.50 or $1.
This encourages her to set aside money she’ll never touch for years. When she’s an adult, setting aside 10% of her income for retirement won’t sound strange. Nor does the idea that she doesn’t have to spend every penny she earns.
It’s true that not everyone needs to go to college to succeed. Many people graduate with degrees and still find themselves in meaningless work. But statistically, people with a degree have more opportunities and income. The higher the degree, the higher the income and life satisfaction tend to be.
Still, I’m less concerned with income (there are plenty of other ways to encourage kids to be successful) than I am about saving for a long-term goal. And college is a fantastic way to set aside money that will be put to good use.
12. Encourage your child to think different—and think big
Only in my 30s and 40s am I realizing lessons about money I wish I knew earlier in life. I’m slowly “un-learning” many limiting beliefs I held about money, and want to teach my kids a different way to think about earning it.
For instance, money is abundant. Your child isn’t limited by how much money she can earn due to her job, gender, or career choice. There are also plenty of ways to earn money besides traditional employment, like starting a business or freelancing.
I also want my kids to think big. My son and I were walking through the mall, and for some reason he was enamored by all he saw, from the decorations to the delicious smells at the food court.
He then said, “I want to work at the mall when I’m bigger!” He wanted the benefit of being at the mall, and saw working there as a way to do so.
Except, I replied, “You know, you could also own a mall when you’re bigger.”
In my home, my family and I have honest conversations about money. We don’t talk about it as an evil thing, but rather something we all use. At the same time, we also don’t want to raise materialistic kids, and instead value character and kindness above all tangible things.
It’s definitely possible to start teaching preschoolers about money so they can develop a healthy relationship with it.
Start by making chores a regular activity to instill the values of responsibility and discipline. Encourage your child to wait to learn impulse control, and give her a piggy bank to save money. Count everything, and introduce different coins. Explain what you do for work as well as how other people earn money.
Have her see you using cash to learn about exchanging money for value. Avoid impulse buys and talk about the purpose of advertising. Start a college fund as a way to practice saving, and encourage her to think differently—and to think big.
It’s never too early to start teaching preschoolers about money — because there’s definitely more to learn than how to write a check.
p.s. Check out Lemonade in Winter by Emily Jenkins, a book about entrepreneurship and counting money:
Get more tips:
- Are You Teaching These Life Skills Your Child Needs in Adulthood?
- Raising Children on a Tight Budget
- What You Need to Do when You’re Stressed about Money
- The Best Children’s Books That Introduce Kids to Math Concepts
- Teaching Kids to Save Money
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