A Unicorn’s Tale: Teaching Kids About Money

Posted 05-25-2010 at 04:59 PM by MyFrugalFunLife

Like most parents my husband and I have struggled with how to teach our kids about money.  Growing up I had no education at all on this subject and when I became an adult I had absolutely no concept of things like credit, budgeting and debt.

Knowing the heartache of foolish financial decisions I vowed to give my kids the necessary tools to make wise choices as adults. But how do you start?

Recently we went to a friend’s garage sale and as soon as we got out of the van I knew I was in trouble-there nestled in between baby clothes and an old air mattress was The Unicorn. It was not your run of the mill pony; it had tassels, you could sit on it, it had a horn. My five year old daughter was in LOVE.

After seeing that the toy was $3 I decided to use it as a way to introduce my daughter to the crazy world of money. A while back my daughter got a piggy bank as a gift with some change in it. She had no idea what money was but with the wisdom that all toddlers possess-more means better. She started adding to her collection of coins by finding them on the ground and doing special projects for me.  Her little piggy bank had accumulated a lot of change and now it was time to explain to her what we do with it.

After she had kissed the unicorn and named her Rosa my daughter started begging me to have it. I told her that I was not going to buy the unicorn but she had the opportunity to buy it with her own money. I then gave her brief break down of how we use money in exchange for the things we want and need. It was a simple discussion but I think my daughter started understanding what her little coins actually were.
Later that day we came home with Rosa. Before I could even remind my daughter, she was heading for her piggy bank. We counted out the money together and I think this little lesson was a great start to explaining the very big world of finances.

Dave Ramsey suggests teaching kids about money in their pre-school years. You don’t have to get too detailed-simple lessons on how money works can set a great foundation for bigger discussions down the road!

Filed Under: General


5 Responses to “A Unicorn’s Tale: Teaching Kids About Money”

  1. whitneywalters on May 25th, 2010 5:21 pm

    Great post!

  2. 2queens1princenmyhouse on May 25th, 2010 6:12 pm

    I have struggled with the concept of money and the kids. They each have their own piggy bank and understand that money buys things and that we save until we have enough, etc. But, my nine year old is still excited to get 3 one dollar bills back as change from a ten because she believes more pieces of money equals more money! (I need a head bang smilie here!) She’s a very bright girl and understands subtraction, but just doesn’t connect the two concepts. It’s driving me crazy! Good post by the way. Very thought provoking.

  3. DaughterofZion1 on May 28th, 2010 2:23 am

    Love Dave Ramsey’s teaching- in fact we need to get back on track. :)

  4. sway on May 29th, 2010 8:28 am

    great post indeed!

  5. Calculate Credit Card Interest on June 2nd, 2010 9:06 pm

    MyFrugalFunLife, this is a fantastic post! Like yourself, I wasn’t exactly well educated when it came to money management as a child either, but through some life lessons, I was finally able to get my head straight. This sparked my interest in Teaching Kids About Money and led me to start a series regarding such at http://www.calculatecreditcard.com/articles/2010/05/30/teaching-kids-about-money/.

    Please take a look and let me know what you think of them. Perhaps you can apply them with your daughter. Then one day she can have a herd of Rosas one day =).

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!

Leave Your Comment Join Diaper Swappers or login to comment!