Tiny Tots and Tiny Coins: Introducing Money to Toddlers
Kids are watching and learning from their parents. They will pick up a lot of good (and bad) behaviors from their caregivers. Children watch how we, parents, use our money. It's important to teach children about money management from a young age. You can help them learn the value of money, how to save and budget and spend responsibly.
You might think, "My child is too young; he/she doesn’t understand the concept of money." When is a good time to start introducing that topic? That’s a great question. I believe the sooner we parents start teaching our kids about money, the better.
I often use my 2-year-old daughter, as an example. She loves playing with coins, so I found it to be a great way to practice counting with her. I realized that it was also an opportunity to teach her about the different coins and their values. Although she might not remember all the names and values at her age, the important thing is that she is exposed to the concept that each coin has a value.
When we go to the store, my daughter enjoys asking about the prices of items. I like to be prepared and have a list; I ask her to help me find items in the store. She likes to hold the list and pretend to read it, which makes her feel involved in the grocery shopping trip. Of course, like any child, she sometimes asks for a toy or something she sees, but I'm not afraid to explain to her that we can't always buy everything she wants, especially if it's not on the list, we didn't plan to buy it, or if it's too expensive. It is not easy, sometimes there are tears involved. I started to shift her thoughts to what she could buy. No, we are not leaving the store with this giant teddy bear but yes, we can buy an apple or two. That usually helps to dry the tears and lift her spirits up, apples are her favorite.
As my daughter grows, my goal is to teach her how to budget her money and set goals. For example, if we sell the cans, she can keep the $2 she earns. As she gets older, she will understand that if she spends the $2 at the store today, she won't be able to buy something she wants in the future for $20.
Money is not just for satisfying our wants. I try to teach my daughter the importance of sharing, and that's not easy, especially when you are a toddler. Recently at the restaurant, she spotted a bouncy ball machine. After counting the coins, I told her she could have two balls or buy one and keep the rest of the coins for later. She wanted two balls. A few minutes later, we heard somebody crying – it was a little boy, not much older than my daughter. She wanted to know why he was upset. After a while, she told me she had an idea; she ran to the boy and gave him a ball. My heart was full! My child came back and said that now the boy was not sad anymore. She was so happy and proud of herself. I hope she will remember this feeling of sharing for a very long time.
Talking with kids about money, budgeting, savings, spending, and charity can be challenging but it's extremely important. When and how you approach the topic depends on your child's age and interest, but it's crucial not to put it off. You will talk with your preschool-aged kid about saving money for that toy that they want but you might start introducing compound interest with the highschooler. If you're not sure where to start, there are numerous online resources available to help you find material that suits your needs. Remember, our kids imitate our behavior, so we're in the best position to teach them what we wish we had known but had to learn the hard way.
