Snowshoeing the dog…

Introduction

Kids and Money 4-5 is the first in a new series of articles designed to help you teach your children about money including its value, its management and how to invest it for maximum returns. Woven through all these fundamental concepts will be financial responsibility without which financial literacy is worthless. With college and credit card debt in the TRILLIONS, we must ensure even our youngest children acquire the financial literacy they need for a secure and happy future.

It’s not easy!

We begin the series with tips and tricks for engaging your 4-5 year-olds in the money game. At this tender age, most of them are just learning to count and are not capable of understanding how the value of money relates to purchases and employment. You may want to refer to an earlier article on How Learning Influences Saving at this website for more information.

Engagement

Walking the dog is expensive if you have to hire a ‘dog walker’. Offering to pay your children to walk the dog at this age is pointless because they cannot understand the value of money yet. They can, however, understand the concept that paying a ‘dog walker’ for a month means we can’t go out for pizza and a movie every Friday night. It’s one or the other! Walking the dog can quickly become the lead-in to a discussion on where money comes from and how to get it!

Bartering–it works!

While young children don’t yet understand the value of money, they seem quite adroit at bartering! They know what they like and they want it–NOW! You can use this natural instinct to your advantage in helping them understand that money doesn’t just pop up out of the ground like a weed. And speaking of weeds, children this age are entirely capable of pulling weeds. And guess what, a nickel for every 10 weeds they pull can add up to a trip to the ice cream parlor pretty fast. Any by the way, this is how mommy and daddy get money–we work for it, too!

I fully support parents who limit their children’s screen time. Enough of coming home from kindergarten to sit and watch TV or play with an iPad even if it is educational. But, if you limit screen time more than normal, you can introduce the concept of BONUS screen time for extra time spent outside or in physical activity/sports! Bonus time can lead to discussions of how you earn bonuses at work and try to save that extra money for emergencies. By the way, I don’t think it’s prudent to discuss traumatic financial affairs in front of children. There’s nothing a 5-year old can do about your financial problems, but they still are old enough to worry about your welfare instead of concentrating on success in school.

“Show them the budget!”

More Engagement…

Everyone is short on time, but no one more that MOTHERS. Increasing your child’s financial literacy works best when you involve them in your daily financial management tasks, where possible. For example, when you’re making up your shopping list, ask you children for input. Not only might it be an insight into the commercials they are watching/hearing, but it gives you the opportunity to talk about your food budget! No, we don’t just go to the store and buy anything and everything we see on the shelves.

Night out with Mom!

Rewards

A girl’s night out with mom can be the best reward of all for sticking to your budget! Share your food budget with your child and take her shopping with you. Keep your receipts and at the end of the month, total them together to see if your stayed within your budget. If you did, plan a special event to celebrate your thrift. Saving and being thrifty should be a celebrated endeavor whenever possible!