How to Teach Your Kids About Money
To help your child learn about the concept (and value) of money, there are many fun and educational activities you can undertake at home. These games have the twofold benefit of teaching children more about numbers and instilling an early degree of financial literacy and awareness.
First there is the concept of allowance, designed for recreational spending (candy, ice cream, toys, etc.) Help your child understand that if he or she buys a lollipop, that is fine, but that’s less money to buy a toy car or stuffed animal. This introduces the integral concept of saving.
Playing games with coins will help your child learn about values. These games will also reinforce counting, addition, subtraction, and multiplication skills—all of which we do virtually every time we make a cash transaction. Grocery store coupons found free in newspapers and junk mail can help you teach your child about managing money, addition, subtraction, and even finding percentages.
For this first activity, all you need is some grocery store coupons and a handful of loose change.
For younger children in kindergarten or 1st grade, you first need to make sure they know the values and names of different coins. Observe the different coins and ask your child to name them. Point out how the coins are alike and what makes them different. Once your child knows the names of each coin, their values and relative values—that five pennies equals one nickel, for example—you are ready to move ahead.
Next, gather some change in your hand without letting your child see what you picked up. Tell your child the total value of change in your hand and ask him or her to tell you possible combinations of coins you might have. For example, you might tell your child that you are holding 18 cents. Your child might guess that you have a dime, a nickel, and 3 pennies. Explain that there are different ways of arriving at the same number; 18 pennies could also work.
Next, look at grocery store coupons. Read each coupon and see how much money will be saved. For example, if a coupon says 25 cents off, point out to your child that it means one quarter will be saved, or two dimes and one nickel. Look at different coupons and practice identifying different combinations of coins to equal the savings.
Ask your child what he or she could purchase with his or her savings. A toy car? A book? A pencil? A notepad of paper? Your child needs to have an idea of how much items cost. This will teach your child about number sense and the value of money. Spending money in one place means not spending money in another.
For older children, the coupon activity can be adapted by asking your child to find the percentage of the original price each coupon is worth. Ask your child what could be purchased with his or her savings.
Parents are their children’s best teachers. They want your attention, and what could be better than having fun with your child while reinforcing learning?