If your young children notice you exchanging coins and bills for goods at the store, they may want to understand how the system works. It’s really never too early to start teaching skills that will help your children appreciate the money they will make and spend throughout their lives. There are a number of organizations and websites available to help parents introduce budgeting to children of all ages through interactive games and projects.
After learning to ride a bicycle, nothing gives children quite as much pride as earning their first dollar. TheMint.org, a website from Northwestern Mutual Life Insurance, has suggestions for ways children can begin to earn money that can be used by youngsters or teens. Helping at home with extra chores or selling old toys or games at a yard sale are just two of the suggestions. The site also has a “Be Your Own Boss Challenge,” an online interactive questionnaire that can give children a sense of the personality traits and work ethic needed to start a business.
Children get their own money from various sources including allowance, paid jobs and gifts from relatives. One of the hardest skills children have to perfect is learning how to decide how that money will be spent. PBSKids.org offers an “It’s My Life – Money” web page with a list of helpful exercises and suggestions that children and parents can explore together. Topics on the site include making a budget sheet, distinguishing needs from wants, expecting expenses like after-school treats and movie tickets and setting short-term and long-term money goals.
The piggy bank is the universal symbol of basic money management. It’s probably where you started, and your child may have one sitting on his dresser right now. Helping children delay gratification and save at least part of the money they have can yield benefits down the road when they want to purchase an expensive item. Visa’s “Practical Money Skills for Life” website has games for saving and calculating funds needed for different items. When children play “Ed’s Bank,” they help collect coins for Ed’s piggy bank and then go to the store to see what he can buy with the money he’s saved. For older children, TheMint.org includes a “When Will You Be a Millionaire?” calculator. Enter how much money you can save annually and choose where it is saved -- traditional bank account, certificate of deposit, etc. -- and the calculator will figure out how long it will take you to save 1 million dollars.
Sharing is another one of early childhood’s themes. Sharing time and money to help others can give as much satisfaction as can earning and saving money. FamilyMint.com, a website aimed at promoting family financial literacy, offers a full page of suggestions for teaching children to think of others when they count their coins. One suggestion is to make charitable giving a family project by choosing a cause together and setting a collective goal for a gift. Another common sense idea is to start small by having children donate a book or one of their gently used toys to a hospital or other organization. When parents and siblings model good financial habits, younger children will be eager to follow their lead.