Introducing Money to Your Preschooler: Fun & Simple Concepts by Jamie Bosse, CFP®

Money

By: Jamie Bosse, CFP®

Preschool might seem early to start teaching kids about money, but experts say our financial habits and beliefs begin forming as young as age seven. So how can you help your child build a strong foundation now? Here are some key money concepts that kids ages 3 to 5 can understand:

1. You need money to buy things.

  • You can talk to them about the different forms of money we use—coins, dollar bills, and credit and debit cards.
  • Have them consider all the things that cost money—toys, groceries, their backpack, etc. Also explain that a lot of things that have value are free. Spending time playing with a friend or cousin is really fun and doesn’t cost a dime.
  • When you are shopping together, include them in the decisions you are making on what to purchase and why.

2. Money is earned by working.

  • Talk about your job or profession and why you chose it. Use examples of jobs they recognize like teachers, firefighters, and mail carriers. You can talk with them about ways they might think of to make money.
  • Explain that some people start their own businesses and others work for established businesses.
  • Talk about different services that you pay people for and businesses that you frequently shop at or like to buy from.

3. You might have to wait to buy something you want.

  • We can’t have everything right when we want it, so we must make decisions on how we want to spend our money.
  • There is a difference between what we WANT and what we NEED – show them some examples of this. (i.e. we NEED food, but we may WANT candy).
  • Delayed gratification is a hard concept for a lot of adults to understand. The sooner they understand this concept, the better! Have them identify an item they’d like to buy. Maybe it is a toy or piece of candy. Talk about how much it costs and help them count out the money required to purchase it.

Like with most things, the sooner you start the better.  If you can engrain a behavior early on, the better it will stick.  Kids who grow up with a good education around money with healthy habits will grow into adults who are less likely get stuck in a dangerous debt cycle, are better prepared for emergencies, and have the surplus to give to charity and support their communities. 
 

Jamie Bosse, CFP®
Senior Advisor at CGN Advisors 
@MoneyBossMom
jamie@cgnadvisors.com

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