Small children aren’t born with an instinctive understanding of finances, so expecting them to grasp concepts such as pay periods, budgets, poverty, credit, saving, tithing, etc. is unreasonable. When they ask for things a parent can’t afford, the parent might react negatively out of their own stress, worry, or even guilt at not being able to provide what their child desires. Having open, honest, and ongoing financial interactions with our children sets the stage for a ‘team-spirit’ response and helps to ease the tension when these requests arise.
I remember one of my little people, about six years old, suggesting that I “use plastic” when I tried to explain that we didn’t have enough money for a particular toy. After I cracked up (and shared that little-ism with my hubby), I decided to start working on teaching economic concepts. Through the years, I’ve used different games and activities to give concrete examples of real life money management and social finance issues, some with more success than others.
~Here are a few of my favorites~
When your child wants to see this:
Or buy this:
Try this cute money management lesson:
Paint a square on a mason jar out of chalkboard paint. On the Wish Jar write what your child wants (or have them draw or cut out a picture of it and tape it on the front), and on the other jar write the amount of money needed for that wish and put that amount in the jar (round to the nearest dollar and use cash for more expensive wishes and quarters for less expensive). Every day before going to bed, let them take out one dollar (or quarter) and move it to the Wish Jar. When all the money is moved over, they get their wish, and in the process have learned about saving up for something in a simplified manner without the extraneous temptations of spending it along the way or keeping track of it that they may not be ready to handle. Keep in mind that this can be a fun and non-stressful object lesson, but only if it’s used sparingly.
Note: This can also be used for special family things like saving up money for gifts for Grandma or for a camping trip, etc. It’s a great time-keeper, too. As the money is moved from one jar to the other, it’s a natural count-down clock!
Social economic issues can be introduced by activities such as joining in a local church or charity’s community outreaches or on your own by organizing a mini-blanket or canned food drive among family and friends and letting your little people help with gathering items and going with you to deliver them. Nothing impacts children (or adults, for that matter!) more than serving others and seeing first-hand how real the people are who are in need.
Setting up a little shopping center at home can be a great way of helping older elementary school aged children learn some business skills such as stocking and keeping inventory, bookkeeping, making change, etc. And smaller children have a blast ‘shopping’ for their own toys or a small dollar store item or even grocery shopping for ingredients for helping you make lunch!
We’ve used several games to teach economics and finances through the years, as well. Here are a few you might like:
And here are some books to check out (Literally! Checking books out from the library teaches a great money-saving option!):