A friend and I were reminiscing over childhood moments when we were given cash to spend at the local market. Whether I was in small town Missouri or she was in Cape Town, we both had a ritual of counting out our money to see how much candy, magazines or toys we could get for $5. We even learned to bargain with our siblings for their change or to pay them back the next week if we needed a little more. We both realized our parents weren't spoiling us with the $5, but teaching us the early concepts of how money works.
Now that we live in an age of credit cards and mobile wallets, I wondering what I could do to teach my daughter about money. I assumed most parents begin this lesson at a young age, and was shocked to find the opposite. Many parents aren't teaching money management skills early on or at all.
Perhaps this is because money is something many of us aren't comfortable with to begin with and is considered taboo to talk about.
Thank goodness for the likes of Dave Ramsey and others for working to turn the tide here for the adults. Now let's take those learnings and discover fun ways to teach the basics at an early age. Eventually, we want our kids to learn concepts like budgeting, negotiation and investing. But first we need to teach the idea that money is finite.
Here's your sigh of relief. You're already teaching this! Think about when a snack cup is "all gone," or when we've reached "the end" of a book. To help build on what you're teaching, here are 3 easy ways to start connecting this concept to money:
- Provide physical tokens that your kids can "spend" on privileges. You can make your own or use something you have around the house like bottle caps with numbers written on them or poker chips. Start each day explaining that you are handing out 3 tokens that can be spent throughout the day on specific things. Then your kids can "pay" you for those privileges, think screen time or a sweet snack. Here's the trick, it's important to be super consistent with what they need to buy and what is given freely to avoid any confusion or potential meltdowns. Bonus: You'll be killing two birds with one stone by teaching basic financial skills, as well as the concept of privilege.
- Ask, "Do we have enough for what you want?" Spend some time comparison shopping with your kids to show them that there might be some really great alternatives to what they want. Help them to understand the price difference, as well as whether or not they can afford it, by encouraging them to use a sorting mat to count the change in their piggy bank. No sorting mat? No problem! The Activity Mom has a great downloadable sheet here. Once they've sorted their money, and understood how many coins it will take to purchase the item du jour, they can make a decision about which item they want to purchase. When they spend the money on their chosen item, they will see how their money runs out.
- Reverse engineer your chore chart. Show your kids that you have a budget of X dollars for the week, and that they could earn some extra money by helping out a little more around the house. For example, you might have $10 available this week, and each time they clean up their toys without being prompted, they could earn $1 of the total $10 available. Or maybe helping you clean the garage is worth $5 of the $10 available. Keep track of the chores they've completed and how much of the $10 is remaining for the week. This demonstrates budgeting and that your money can run out. I like this example from Home Grown Traditions.
These exercises empower your children to begin to make informed financial decisions for themselves. The best part is that they hit all three of the major learning styles: tactile, audio, and visual. This not only means that your kids are likely to have a greater understanding of the hows and why's, but they're also likely to retain what they've learned - no matter which learning style comes naturally to them.
The real trick is to start teaching your child about the finite resource of money, opportunity cost, and the value of waiting and decision making. Remember to have fun with it, you might even learn something new, because goodness knows when it comes to money, we all have something to learn.
Ashley Byrne
This post has been re-published with permission. It was originally posted on Medium. 
