So, how to teach 4-5 years old kids about money?
While kids under five won’t be able to grasp the complex concepts of money, you can start small and teach them the basics of financial literacy at an early age.
What is financial literacy
The term “financial literacy” sounds like something complicated. But what is really behind it? Financial literacy is a set of skills that enable people to make smart decisions about their money.
Financial literacy means that you understand how to earn, save, spend (including donating to charity) and invest money. Even preschoolers can be taught the elementary rules of how to make and manage money.
Why financial literacy is important for children
If you teach your child how to handle money from an early age, you will form good financial habits in him that will stay with him for many years.
It is important that parents talk to their children about money and answer all their questions. So in the future, children will be able to manage money wisely.
How to teach 4-5 years old kids about money (financial literacy)
The best way to develop your child’s financial literacy skills is to provide them with activities that give them the experience they need. Consider some interesting activities for children of different ages that will teach them how to properly manage money.
- 4-5 years old children can be explained what denominations have different points and banknotes. Let the child hold coins and banknotes in their hands, look at their size, color and weight. Then invite the child to collect a certain amount of small coins (for example, count 1 dollar and 25 cents).
- Ask the child to count the money, spread it out, for example, in 10 dollars and tie it with an elastic band. You can reward your child with a small amount if he counts the money correctly.
- Play scenes. Play with your child the market game, shop, pizzeria, etc. Let your child practice selling and buying various goods.
- Play a game with your child: give him a certain amount of money. Take a few things and set a price for each of them. The child must “buy” the thing by counting the required amount.
- Explain to your child the difference between needs and wants. Have him make a list of what he needs and what he wants. Little kids can be encouraged to cut out pictures from magazines. This is necessary in order to give the exercise a playful form. Then show the child with examples how the necessary things differ from the desired ones. Talk to your child about what he needs to survive (e.g. food, water, clothes, etc.) and what he wants to have (e.g. toys, computer games, etc.).
How can a child earn money
Some parents give their children pocket money for household chores, some do not. In any case, there are other ways in which children can earn money.
- Offer your child a job for which you will pay him. The child can walk the dog, work in the garden or garden, etc.
- You can ask close relatives to give your child money for their birthday instead of toys or other gifts. The child can keep the money in a piggy bank, or you can deposit it in a bank.
- Older children can perform more complex tasks: putting up advertisements, handing out flyers, etc.
How to explain the idea of charity to a child
It is, of course, important to teach a child to earn money and manage it. But it is equally important to explain to the child what charity is and why it is also important.
If a child donates part of the money he earns to charity, this gives him a sense of purpose, unity with the people around him and gratitude.
Invite your child to choose which charity he wants to donate money to. Today there are a large number of charitable foundations that support different causes. In addition, the child can donate money or things to an orphanage, animal shelter, etc.
At first, you may find it uncomfortable to talk to your child about money, earnings, etc. However, the sooner you start bringing up these topics in conversations with your child, the better you will be able to develop his financial literacy skills.
When your child grows up, he will be able to properly manage his money and make smart financial decisions.