5 top tips to help your child understand money
The current cost of living crisis is continuously increasing and worrying for many. It is therefore crucial that our children are prepared to handle financial challenges, and starting to educate our little ones about money from an early age is a good way to do this. It can help them develop mathematical skills, financial awareness, and an understanding of the value of money. Here are five easy and fun tips to help you teach your little one about money:
Introduce Money into Everyday Life
One of the best ways to teach children about money is by introducing it in everyday life. For example, while shopping at the supermarket, explain to them the quantity of the items e.g. “One apple costs 42p!”. Why not also involve them in the process of paying for items at the checkout counter and explain the concept of change?
Children love to get involved and copy what adults do, plus the ‘beep’ of the card tapping on the machine might be a huge excitement! These small interactions can go a long way in helping children understand the value of money.
Use Mathematical Skills to Teach Financial Concepts
Mathematical skills play a crucial role in financial education. Use simple mathematical concepts to teach your little ones about money. For instance, you can use addition and subtraction to explain how money is earned, saved, and spent. Using the apple as an example “We have 50p and the apple is 42p, shall we count and see how much we have left?”.
You can also let them know mathematical terms such as ‘more’ or ‘less’ - both useful words that can be applied not only to money but to whether they want more or less peas at dinnertime!
Encourage Saving Habits
As your little one gets older, you could start to encourage them to save money by providing them with a piggy bank. If your little one is older, you can teach them the importance of setting aside a portion of their allowance or earnings for the future.
You can also incentivise them by offering to match their savings, help you around the house, or provide a reward for achieving a savings goal. For example, if they wanted to buy a magazine, they would have to save ‘x’ amount and then they could go to the shops with you and buy it.
Make Financial Education Fun and Interactive
Children learn best through fun and interactive activities. Use games and other activities to teach your little ones about money.
Play shopkeeper and customer, where your child can practice counting money and making transactions. These types of games are fantastic opportunities for you to spend some quality time bonding with your child, help them understand the structure of questions and answers, and support their communication and language skills.
For younger ones, doing activities such as coin rubbing with different coloured wax crayons is fantastic for strengthening their fine motor skills which are part of their physical development, and of course, the magical part too.
Or, you could do the same with playdoh and see what patterns each coin has left behind once pressed into the dough. The opportunities are endless!
Does your little one love to role-play as a Pirate? Well, treasure hunts with coins hidden in the sand might be something that they would love to dig around for. Use mathematical language such as “You found five 10p’s!”, “I wonder how many 20p’s you can find”, or “Shall we count how many 1p’s you have found?”.
Also, if your little one is old enough to understand concepts about budgeting, investing, and managing money, you could also use board games like Monopoly to help.
Lead by Example
As a parent, you are the most significant influence on your child's learning and development. Lead by example by demonstrating good financial habits. Explain to your child how you manage your finances, such as budgeting and saving for the future.
You could tell your little one that you are “collecting five of the round gold-coloured coins to make £10 so I can buy you a toy”. For older children, you can involve them in family financial decisions, such as planning a holiday or purchasing a more expensive item.
With early educational intervention, we can help our children prepare for a financially secure future.
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