How To Teach a Pre-Schooler About Money

by mike on December 16, 2010

It might seem a little premature to teach a pre-schooler about money. I think it is a great time. Why not start early and weave the lessons of money into the moral fiber of your kids early? Parents often are too reactionary and deal with problems after they occur. Since dealing with money is something all children will have to do eventually, being proactive will hopefully prevent major problems in the future. Allow me to share how my wife, Mandy, and I have begun to teach our five year old how to handle money.

We started the process shortly after she turned three. We would have her do a “chore” to earn money. With a three year old, the chore was nothing too complicated. It often involved her picking up her toys, which really meant Mom and Dad doing most of it with her putting a couple away. Once she completed the task, she was given a quarter. We had a clear container in her room and would put the money in there so she could watch it grow. Occasionally, we would add dollar bills to help it “grow” even more. We would occasionally allow her to spend the money on something she might have seen at Wal-Mart or a snack at one of my volleyball games. The important lesson we wanted to teach her at this age was that if you work, you get paid. If you don’t work, you don’t get paid. It’s an extremely important lesson for her to learn early in life that should help her later in life.

When she turned five this year, we added a little more complication to the system. Now, there are a few chores she has to do every night just because she is part of the family. In other words, they are chores she does not get paid to complete. For instance, she is to make her bed in the morning, pick up her toys at night, and vacuum under the table after dinner. In addition, there are things she can choose to do in order to earn money. Examples of these include picking up her younger sister’s toys, emptying her laundry hamper, helping set the table for dinner, or any other extra jobs we come up with. We don’t harp on her to do these at all; she chooses to do them and get paid, or not do them and don’t get paid. We have a chart where Mandy tracks what she does each day. At the end of every week is payday where she gets paid based on how many jobs she does. We pay her ten cents per job. She divides the money among three different envelopes:

1. 1.  Giving. When we go to church each week, she brings her own money to give. That registers much more with her than when we just hand her our money to put in the basket. The idea is that since giving some of her money will have been a part of her life since she was five, it will be natural for her to continue that as an adult.

2. 2.  Saving. If she wants to buy something “big” that maybe costs ten dollars or more, she knows that she has to wait and save for it. This teaches her to delay gratification and understand that some things in life you have to save up and pay for. Instead of just telling her to avoid debt, we are instilling the discipline in her to make that happen.

3. 3.  Spending. It is also important to have some fun with money and she needs to understand that as well. She generally likes using her spending money to buy snacks at various events. Reminding her that she will want to have money for popcorn at my volleyball game has been motivation on multiple occasions for her to do some extra work.

I realize that some may think it’s crazy to have a pre-schooler doing “work” for money. Just like other things (manners, a spiritual life, respect for parents, etc.), the earlier you teach your youngsters, the more it becomes part of who they are. Many kids go off to college never having been taught how to handle money and it gets them into trouble. By instilling good financial fundamentals in your children, they will learn to be hard-workers, givers, and savers. Those are three traits your children will receive blessings through and that parents can be proud of.< >< ><–>

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