Children learn about money in plenty of places outside the home – school, camp, fundraisers, etc, but giving them a strong base to work from will set them up for life. The golden lesson is: Money isn’t about luck – it’s a result of hard work and clever choices.
Financial literacy through the ages:
Age 3: By this age most children understand that you hand over money for things you want. They accompany you to the shops to buy food, to buy presents at toy stores, or to the petrol station, and watch this exchange of money happening on a daily basis. You can teach them about the bartering system that existed before we had money, when people used to trade items for goods they wanted.
The trouble here was that they had to agree on the value of these items and what was a fair trade. Plus, imagine carrying a pig around so you could exchange it for bread, eggs etc! This brings new meaning to the concept of a ‘piggy bank’! This brings us to another element – make it fun! Kids learn quickly when they’re enjoying themselves, so don’t turn this into a chore.
Age 4-5: While many of us like to boast that our kids can count to 100 at the age of two, most children don’t understand the concept of numbers and counting at that age. They’re usually parroting and, while that’s impressive, it lacks understanding.
By the age of four, you can start teaching your kids about coin counting – keep the concept simple here. Kids get into this really fast, especially when they have a pile of silver in front of them. Talk to their interests. If they have an insatiable sweet tooth, use it to motivate them! You could say: “If a FizzPop costs R1, count your coins and see how many you could buy.” The key here is to explain the concept to them, but then let them try it themselves, even if it means you’re patiently standing by dreaming about a margarita while they painstakingly count out the coins.
Age 6-7: Again, it’s about motivation – and real-world experience. If your child wants the latest tablet and can’t understand why you’re not keen to fork out that money for a tech toy, this is your opportunity to teach them a big lesson. We’re talking lemonade stand-style financial wisdom. Help them to think of a simple neighbourhood money-making scheme: ask them what they think people need such as, car washing, a cool drink on a hot day, etc. Help them to come up with a ‘business plan’ – how much will it cost to make the lemonade? How much will they need to sell the lemonade for to make a profit, how much lemonade should they make? How many gallons of lemonade will they need to make and sell in order to buy that tablet? Ah, the value of a lesson about needs versus wants… Ka-ching!
As your kids get older they can learn more about savings accounts, creating a personal budget, and borrowing money (debt and credit). Try to mirror your lessons with what they’re learning at school, but remember to always bring it back to their own interests – and give them the space to make mistakes. |
