Wednesday, May 27, 2009

Talking to your kids about the value of money.

There was a question posted on that I really wanted to share here: How do you explain the value of money to your child?
With words like 'Recession' and 'Economy' floating around everywhere, kids tend to be even more confused then before about money and the current economic situation. I have also realized that I need to help my daughter understand the value of money and money management to some extent (since she is only five). These are some starter tips that can help the average parent explain 'money' to kids who do not know how to count yet.

1. Money is not given but earned when working. You can help them understand that by giving them money (fake money if you prefer) in exchange for chores or picking up their toys. My daughter always thought that if I wanted money I could just go and 'pick up' (her words) some at the bank, this is a nice way to help her see the relation between work and money.

2. It's important to have money to buy the necessities of life first, like food and shelter; and then if there is any left, other things can be bought like movie tickets and that special toy she has been wanting. Children have a lot of 'wants' and to them everthing is a necessity.

3.Saving our money is important to provide for the future. Sometimes it is hard for young children to understand the concept of 'saving for tomorow', but if you mention a vacation that they have been looking foward to, explain to them that this vacation is possible because of all the planning and saving that you had to do as a family.

image provided by Darren Hester


Marie-Ève said...

Great post. I was thinking about that as well. My son is still a bit young but I'm sure this will come fast enough...

Elissa said...

So glad to hear others use the word "earn" instead of "deserve". We teach our kids the value of money too... I don't think it is ever to early to start! Great post!