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!