All of us eventually learn about money. Many of us will remember our parents telling us, Money doesn’t grow on trees you know! Whilst that’s true, it’s not a terribly helpful statement when it comes to learning about where money does come from, and how to keep hold of it.
From the age of about 5 or 6, children have the capability to understand basic monetary concepts such as identifying different coins and even adding up small amounts of change. Your child may have done some maths work involving money in school. From this age it’s a good idea to gently bring money into the conversation whenever relevant and appropriate. That doesn’t mean we need to sit them down as we work out the household bills; more that we give them the opportunity to understand as much as they can about how money works.
Here are a few tips:
Open a savings account for them. You could collect up small change in a piggy bank and every now and then, sort it into money bags and take it to the bank. This helps to familiarise them with how money works, what banks do etc.
Explain how money works in simple terms. If your child sees you go to the cashpoint and withdraw money, they may well think anyone can just come and get some money when they need it! Instead, bring them with you to the cashpoint and explain: I use my bank like you use your piggy bank to keep my money safe, and then I use this machine to take money out of my account.
Play shops. Ok, this is not everyone’s cup of tea but it can be a great lesson in understanding the concept of not being able to afford something. Put price labels on the items in your pretend shop, and add up the shopping bill, using real or pretend money to pay for them. This can be a useful lesson in a safe environment.
Play other games. Board games such as Monopoly work well for basic maths skills and also the concept of buying and selling.
Give your child pocket money, or a choice in where money is spent. If you don’t want to hand over the actual cash for your child to misplace, you can always remind them each time they ask for something: Well, you only have X amount to spend on things this week; do you really want to buy this? It’s important to allow them to spend their money on things they don’t need, and to allow them the experience later on of realising that if they’d not bought one thing, they could now be enjoying another.
Let your child pay in the shops. Give them your purse to find the correct change, or ask them to figure out how much change will be owing. This sort of thing can be tedious when they’re first learning, but can be very handy as time goes on.
Give children the opportunity to earn their own money. This is a good way to teach the value of work and even to encourage an entrepreneurial spirit. You can either have a set list of chores with a corresponding wage, or invite them to make their own suggestions and "pitch” to you.