If you’ve ever visited a store with your little ones in tow, it becomes pretty obvious that they think money grows on trees. Or rather, that magical drive-thru dispenser at the bank. It can be a tricky subject to tackle with kids, but when you try a hands-on approach, those trips to the toy aisle become a bit more meaningful. From lemonade stands to chore charts, read on for a few simple ways to master the money game with your mini crew.
photo: arecknor via Flickr
1. Set a goal.
One of the most important principles of helping kids to understand money is to teach them that money is earned and better yet, saved. First, choose an item with your kids that they’d like to purchase with their own money. Then set up a clear jar or piggy bank (so they can visualize!) specifically for their savings toward this goal. Every time they receive money via allowance or gifts, they can add to the jar to reach the amount they need! Once your little ones have saved enough money toward their goal, take them to the store with you and allow them to pay for their item with their own money.
photo: Noa Strupler via Flickr
2. Start saving. Take your little ones to open their own savings account. Show them how to keep track of how much money they have saved by writing the beginning amount in a register or at the top of a piece of paper. Write in how much is added when making deposits and deduct how much they have spent, so they can see how the amount grows and shrinks.
3. Explain how the bank works. Your kids may think the bank (or the ATM) is just a place you visit when you need more money. Take them with you to the bank, and explain that it is a place that keeps your money safe after you’ve earned or saved it, not somewhere that just gives it away.
4. Play cashier. Use pretend money (either play money you’ve purchased or get creative with your kids and make your own!) to play cashier with your kids at home. Set prices for items around the house—food, clothing, you name it—and allow them to pay with the pretend money, showing them how much they need and how much change they should receive after paying.
photo: Amy Gizienski via Flickr
5. Start a lemonade stand. What better way to teach your kids about money than by running their own “business?” Set up a lemonade stand for your neighborhood, allowing the kids to set their own prices, and showing them how to collect money, and count back change. And, if they want to try something different, check out these 5 Great Alternatives to a Lemonade Stand.
How do you teach your kids about money? Tell us in the comments below!