dollarsKeeping with the theme of April being youth month we want to share some ways to help your kids learn about money. Personal finance is showing up on many school curricula these days, aimed at teaching young people how to manage money sensibly. That’s terrific. But basic attitudes are formed at an even earlier age, and there’s a lot Mom and Dad can do to give a preschooler an emotionally healthy understanding of what money really means. Consider these ways to have fun with your youngster while showing how those funny-colored pieces of paper fit into a balanced life.

1. Show them the money.

Once kids learn that money will buy stuff, they tend to badger their parents for more of it. One patient dad gathered his family around a table on which were the bills to be paid that month and the cash equivalent of his paycheck. By the time he’d physically set aside the cash needed to pay each bill, his children were agog at how little was left. (In fact, they began to spontaneously think of ways to cut spending and earn money to help out.)

2. Discuss a superhero’s finances.

batmanIf Batman weren’t independently wealthy (and where do you suppose the Wayne Enterprises wealth came from?), how might he earn money to pay his butler Alfred a salary, buy new tires for the Batmobile, and send Robin to martial-arts classes? You can really have fun with this one.

3. Make a ceremony out of managing an allowance.

Once kids are old enough to handle coins, consider paying them a weekly allowance in cash. Set up three clear glass jars labeled “Spend,” “Save,” and “Share,” and urge your children to put one-third of their allowance in each jar. They can spend the money in the first jar whenever they like, while saving the money in the second jar for something they want but can’t afford right away. The money in the third jar is to be shared with a good cause they select: the town library, animal shelter, or food bank, perhaps. As you pay their allowance, congratulate them for managing their money well. They’ll be pleased and proud as the cash mounts up. Just be sure to pay reliably, and keep your mitts off their savings!

4. Take a kid shopping as your “money manager.”

grocery cartIt’s easy for young kids to view a supermarket as a kind of ATM for food. To put shopping in perspective, first show your child the amount of money (in cash) that you can spend. In the store, instead of automatically picking a familiar product you usually buy, ask the child to help you decide if it’s the best choice. Do other options cost less, use preferred ingredients, or omit additives? (If your child isn’t a reader yet, you can explain what the labels say.) Enter the price on a calculator once a choice is agreed on, and run a total before you check out. If you’re over budget, explain that some items have to be put back. Again, ask your child to help you choose. Finally, allow your little one to pay for the groceries (under your supervision, of course). You’ll be helping to train a smarter shopper—and your child will bask in the glow of your praise.

5. Involve your kids in a family financial decision that affects them.

For example, if you’re trying to decide whether to pay for summer camp or use that money for a family trip next fall, ask your child to join the discussion. With younger kids, it’s important not to over dramatize the choice. Stay calm and confident, so they understand that while your family has a finite amount of money, it will continue to be ample to take care of them.

6. Teach them to enjoy math.

mathYes, seriously. Students who take extra math courses in school manage their credit better, enjoy more investment income, and have higher home equity, according to a 2015 study led by Harvard Business School Professor of Finance Shawn Cole. “A lot of decisions in finance are just easier if you’re more comfortable with numbers and making numeric comparisons,” he told The Wall Street Journal.* So encourage your preschoolers to have fun with basic math concepts—especially daughters, who often get the message that math isn’t for them.

7. Bring them to visit their credit union.

April is Savings Month, and at Winslow Community Federal Credit Union, we’re on a mission to help more young people begin savings programs of their own. Ask us to open a Monty Moose savings account for your child. Then, show them how to deposit the cash they’ve accumulated, their grandparents’ birthday check, or maybe a little seed money you provide. We’ll be glad to answer questions. From then on, we hope they’ll realize money isn’t that mysterious—not with you (and us) on their side.


*Charlie Wells, “The Smart Way to Teach Children About Money,” The Wall Street Journal, 2/2/15