From a very young age, whenever my children want something that we don’t have the money for, they always tell me to “just charge it.” What child isn’t aware of the little piece of plastic that brings so much joy into all of our lives? From toys to amusement parks, cash is no longer the key, but instead, one simple swipe of the credit card can pay for anything, or so they think. Credit and credit cards can create a false representation of our economic system by giving the illusion that there is a limitless abundance of resources always at our disposal. For some, this may be true, but for the majority of us, every penny counts, and early on, it is important for us to instill this value into our children and to teach them to how to count their pennies and learn the value of money on a daily basis.
Because children are tangible learners, it helps for them to see and experience the process of saving money to spend money, and to comprehend that all the charges made on a credit card must eventually be paid back with interest. Do something as simple as taking your child with you to the bank. As you deposit money into your account, explain to them that the bank holding your money for you, and paying you for that privilege. Help them understand that when you extract the money from the ATM machine, or pay with your debit card, you are in fact, taking back your own money the bank has borrowed.
Even something as simple as preparing a family dinner requires economic planning. Ask your child how much they think their favorite dinner costs to make. Have them plan out a menu and offer to take them shopping for the necessary items. Before going on your shopping expedition, have them make up a list of what they need to buy and how much they think each item will cost. Have them go through the newspaper and help clip coupons. Give them a budget and tell them they are responsible for staying within that realm. As you shop through the store, point out the price differences of certain items. Show them ways tha iit may help them stay within their budget to buy a less expensive ingredient or one that is on sale. If all the items they want don’t fit within the budget, help them figure out what to exclude from their list, or how to make more economical choices.
When you arrive home, show your child the grocery receipt. Let them see up close the cost of each item and the taxes that were applied. Then, together, you and your child can prepare this very special dinner. It gives children a great sense of accomplishment to have been involved in the entire process, from planning to shopping to cooking. It also helps them to understand how much thought must go into every purchase, even the simplest ones, such as the food we place on our table.
Bonus Activity:
Create a money jar with your children. Have them decorate a mason jar, or a coffee tin, then save up their allowance or spare change to buy something they really want. This may take weeks, even months, but it will be an important lesson for your child to learn the value of money and see how the idea of saving can build for something in the future.
