In my work with early learners to college students, I consistently find a knowledge gap with students—money. Although students in pre-kindergarten (and even some three-year-olds!) and older can identify pennies, nickels, dimes, and quarters, many struggle with the concept of money in the abstract.
Why can’t every toy in the store be purchased? While some money subjects, like debt, are inappropriate for children (particularly early learners), introducing concepts of money early on can lay a healthy foundation of knowledge for the future. See below for five ways to introduce the concept and value of money to early learners:
1. Have your preschooler help create a list before going to the store and stick to it
Adhering to a list when shopping—particularly for groceries—is a simple way to introduce the concepts of planning and budgeting to your early learner. This doesn’t mean you can’t pick up an item you forgot to put on your list, but try to avoid impulse buys like candy and soda from the checkout line.
2. Have your early learner view as many transactions as possible
Ranging from shopping in grocery stores to paying bills, allow your early learner to, count the money with you as items are being paid for, and listen to the exchange of money for goods. The earlier the concept of trade is introduced, the easier it is for your early learner to understand the value of money later on.
3. Introduce the value of coins
According to experts, a three-year-old can recognize that money has trade value (it can be exchanged for an item), but may be confused when they don’t receive anything back when giving a cashier their coins. In general, a four-year-old can fully comprehend the trade aspect of money, but may not understand the value of it. For instance, they might believe that a dollar can buy two or three toys, instead of one, and also may not know that a dollar is worth more than a quarter. However, with frequent exposure your four-year-old will slowly grow to understand that some currency is worth more than others. Learning this early will not only give them a boost of money sense, but also place them in advance of many of their peers entering kindergarten.
4. Introduce a small allowance at five-years-old OR when the number value of different coins is understood
Giving your five-year-old early learner an allowance serves to guide them in the finite value of money if spent or saved, and gives them practice in transactions (for instance, if you allow them to buy a small treat in the grocery store).
5. Encourage saving, even if you feel like it’s falling on deaf ears
Your early learner with an allowance most likely will not be prepared to save their newly earned money; however, encouraging them to save by providing a fun piggy bank like http://www.amazon.com/Electronic-Piggy-Bank-Pink-years/dp/B004KAWXHY can serve to introduce saving concepts. Also key, according to experts, is not to help supplementing the purchase of anything bought with an allowance.