Teaching kids about money should be a fun activity and worked into their day-to-day activities. Not something that it is forced. Like reading and writing, learning to manage money, counting, adding etc, are all basic skills your little one should grow up practising.
Good news is that whilst learning about money your child is also practising their maths skills. Working out how much something costs, how much change they are owed or determining what their savings amount will be in 6 months, all involves maths.
There are many websites that have free online games that help kids learn about money and maths at the same time. Some have interactive or online money games and some have money worksheets for kids. Some of them are:
For other money games and activities for kids, visit our Money Games section.
You know how important it is to teach your child to save money. You know that you need to start when they are young so that they develop a good attitude toward money that will stay with them throughout their life.
What is the right age to start? How can you incorporate education about balancing spending with saving money into your child’s daily life without boring them to tears? How can they understand the concept of compound interest at an early age without reading a school textbook?
It’s actually easier than you think as long as you turn it into fun.
Start Young and Be Consistent
If your child wants a particular toy, start a savings project for them. Get a decorative, colourful savings jar. Have your child draw a picture of the toy he or she wants or go through magazines with them to find a picture of the toy. Paste the drawing or picture on the outside of the jar, but make sure the jar is transparent so that your child can see the money accumulating inside.
If your child gets pocket money, discuss with them how much of the pocket money they want to put into the jar each week. Explain to them that you will add ‘interest’ to the savings jar on a regular basis.
Once a week, sit down with your child at the table. Take the money out and help your child count it. Then explain that you are adding a bonus, a certain amount based on the amount that is in the jar, and that you will do that every week.
Each subsequent week, make it clear that you put more into the jar because you are paying them interest on both the money that they have put in and the money you previously added as interest. Keep a sheet with the jar that delineates how the money is adding up. This sheet will go far to help them understand the time value of money.
At first, they won’t understand the concept of ‘interest,’ but eventually they’ll get the idea of compound interest and may want to delay gratification by saving more of their pocket money each week so that they will be able to buy the toy sooner.
Before you know it, your child will understand that they can put away money now for more in the future, and you will have helped them develop a healthy attitude toward finances.