Right on the Money

noted.

RIGHT ON THE MONEY

Preparing young kids to understand spending and saving

IT’S A PROBLEM VIRTUALLY EVERY PARENT ENCOUNTERS WHEN THEY RUN INTO A STORE. Your child spots something they want. Let the pestering and begging begin, right? Most kids don’t really need another toy. But there’s something else that’s annoying about the “can-I-haves.” Kids often don’t really understand that toys cost money and that money isn’t unlimited. Spending even a little here and a little there adds up. Hey, that’s a lesson some adults struggle with too.

While there’s not much you can do in the moment (insert in-store meltdown here), there is something you can do over time: teach them about spending and saving. There’s a lot to understand, but you’ll be doing your child a favor in the long run. In our next issue, we’ll cover everything from credit cards to cryptocurrency—here, we start with the basics.

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COUNT ON IT SAVING FOR THE FUTURE

The right age to begin introducing the To introduce the idea of saving to your concept of money may be younger than child, help them think of something they’d you think. “I suggest parents start as soon like to save for. Since kids are often visual as their kids are asking for things and old learners, give them a clear jar for storing enough to not put money in their mouth,” their money and a chart to color in their says Plano mom Keli Calderon, who found- progress toward the item. Starting with a ed The Smart Money Academy, a financial relatively small purchase is a good idea, so literacy program with online classes for kids they can experience success quickly. (thesmartmoneyacademy.com). Some kids will be natural savers; others

Numbers and counting are fundamental will want to spend as soon as the money is to money, so start there with your toddler. in hand. To encourage saving, offer to match Count beads, Goldfish crackers, buttons, their savings for large purchases or provide anything—then start counting coins. Go opportunities for extra chores. But don’t force over the names of the coins and what saving. Calderon says it’s a skill generally they’re worth. To reinforce those concepts, learned over time. “Saving out of obligation MidCities Montessori preschool teacher may ultimately lead to resentment and is a lost Laura Lee uses coin games. “Parents can learning opportunity,” she shares. “Since my play the mystery money bag game, where husband and I don’t pay for everything our you reach into a bag of coins and pull out kids want, they are self-motivated to save.” one coin each and have the child determine what coin TRIAL AND ERROR holds the largest value,” the While you’ve probably seen Bedford teacher suggests. ads for kids’ debit cards or You can also hold out two similar products, stay with coins and ask them to iden- physical money until around tify, say, the nickel. Kids can age 9 or 10. “Studies have sort a pile of mixed coins shown that spending cash to get used to the different actually triggers pain recepsizes, colors and designs. As tors in the brain. This doesn’t your child moves into addi- happen with debit and credit tion, help them add a few cards,” Calderon says. “The coins and bills together. pain is an important part of teaching kids the value of EARNING DOLLARS AND money. If we move to virtual MAKING SENSE money too quickly with our kids, spending Counting money is important—but how money becomes ‘painless’ to them.” do you help your child understand money’s Another pain they need to feel: money value and meaning? Calderon says it’s mistakes. “It’s fine to give [your child] important for kids to see bills and coins advice about a purchase,” Calderon says, being exchanged for items at a store. Small “but there are great lessons to be learned in children need to see and handle physical mistakes, too.” money; they’re not ready for abstract forms Finally, talk to your kiddo about keeping of money like a debit card, according to money secure. “Role play different scenarios Calderon. Still, it’s not enough for kids to see with your kids,” recommends Calderon. that they can buy things with money. They “What might happen if you brag about how need a sense of where money comes from. much money you have? What might happen

That’s why Calderon recommends if you show it to people?” that parents give their children simple chores for an earned allowance. With an DON’T DELAY earned allowance (as opposed to money For parents who aren’t particularly savvy given without responsibilities), kids make when it comes to money, there might be the connection between work and pay. some hesitancy to attempt to teach their Richardson ISD teacher Christina Etri has kids. Calderon admits that her own finances seen this play out in her classroom. She’s were a mess when her sons were little, so a junior high teacher now, but when Etri she started them on money lessons later. If taught third graders, each of her students you’re in a similar position, she encourages had an in-class job and got paid in class- you not to wait. “It is important to push room currency. “They understand at an through these feelings so that money issues early age, ‘This is my job, and this is how do not become a generational legacy,” she I get paid,’” Etri says. Her students could urges, pointing out that parents don’t have “buy” a pajama day or an item from the to be stock market experts or real estate classroom store, or save their earnings for moguls. “Just learning and passing on the an end-of-the-year auction. basics can make all the difference.”

“THEY UNDERSTAND AT AN EARLY AGE, ‘THIS IS MY JOB, AND THIS IS HOW I GET PAID.’”