The Piggy Bank: Sensible Spending
I was lucky enough to stumble upon an amazing infographic that laid out some age appropriate lessons that lend themselves to sensible spending in the future! This is an important topic because while our kids are learning a lot of valuable information in school, only 17 states require a high school course in personal finance. That means this responsibility falls on the parents. This week we are going to look at the recommendations and abilities of a child between the ages of three and five.
While children at this age will not be able to grasp complex financial concepts, they can start building foundational knowledge that will set the stage for later in life. They can understand patience and saving money versus spending it and are starting to learn about numbers and counting. Make a game out of it and play store with fake money, pretending to buy and sell goods. You could also work with them to begin identifying amounts in bills and coins then playing matching games with these amounts.
As we’ve discussed previously, it is a good idea to have them start earning money however you choose to do it—through an allowance, a lemonade stand, an earning system with completing tasks around the house. As they start earning money they will be able to start saving it; sit down with them each week to count it and commend them for saving their money! When they decide they would like to spend their money then take the time to discuss the pros and cons of spending it versus saving it or by comparing two items that they are torn between.
By doing these things you will be setting the foundation for your child’s personal financial outlook and will be able to build on a strong base. Check back next week as we continue into the next age bracket!
Sources: http://www.visualistan.com/2015/04/the-road-to-responsible-spending-infographic.html