If Kids are Like Sponges, Then Give Them Lots of Money Lessons to Soak Up

smiling little girl plays shop

smiling little girl plays shop

By Jayne Berkaw Little kids are like sponges.  All day long, they soak up information.  They see dad walk up to a machine in a wall, insert a little card, punch some buttons and out pops green papers.  They see mom load up a shopping card with yummy food, give a nice lady or man the same green paper and shiny discs, or yet a different card, and then get to take everything home.  This is a wonderful system!

Simply put, they get really early in life that trading one thing for another is standard procedure in the world.  Alas, however, it’s very important to dash misconceptions by starting early to teach your tot how the system really works.

Before they can learn to handle money, they have to learn about money; how to identify each coin by its size and color, and then by its worth.  Pennies have a distinctive copper color, though that’s only a coating of copper; it’s mostly zinc, and according to Wikipedia, as of 2010it cost the U.S. Mint 1.79 cents to make a penny! Anyhow, they’re still the best place to start since they are the smallest denomination. Then move on to nickels, dimes and quarters and finally half dollars.

Give kids a pile of coins and have them first sort by size, and later by amount, from one cent up to twenty-five, and then fifty.  Put coins in a bag and see if they can identify them by how they feel.  Make rubbings by putting coins under white paper and pressing back and forth over them with colored pencils or crayons. Talk about each coin and what it’s worth.

Once they can count, play banker by having your child count ten pennies and trading the “bank” for a dime.  Do this with other coins too.  If you collect extra change, have your child help you count and roll it, and then take it to the credit union or bank to turn it into larger denominations.  With my kids, I just had them first sort the coins and then make piles of ten.  When we were done, if there were a few coins left, I let them have those as “payment” for their help.  We might go to the store after that, so they could spend their earnings and see what they could actually buy for various amounts.

Kids love play cash registers, so if you can get hold of one and set up a “store” with cans, boxes and whatnot from your kitchen, they will spend hours playing, and you can grab a teachable moment or two by serving as shopper or clerk.

When they get coins down, add paper currency, starting with ones, and fives.  Play Monopoly and other money games to drive the concept of value home in a fun, engaging environment.  When you’ve got an adult decision to make, like buying a car or planning a family trip, involve young ones in the process.  Ask them questions, get their opinions, assign them tasks to give them a feel for what goes into real life choices that involve money management.  Processes like this help them differentiate between wants and needs, and begins to set up the foundation for future money lessons like allowances, budgeting, planning, interest, etc. (FamilyMint specialities!). Play with them, read to them, watch TV with them and always be on the look-out for a quick life lesson on money and its use. You’re their best role model, so do it well, and give the little sponges lots to soak up!