Thursday, May 22, 2014

{Money Matters} Money Concept for the Little Ones

During my early childhood, I was quite a blur kid who had no understanding of money value. I just knew I must not simply spend as those were my old pa's hard earn money and I had my piggy bank to save my extra allowances, but other than that I was clueless how to conserve or make good use of my money. I learnt to manage my money and investing them only after I started my first job, some how school did not and still does not teaches money management, and in my opinion it would be too late to wait till college years. So, I decided to take this matter into my own hands and starts my little ones early.

After much research, reading and applying with my little boy, I am happy to share the tips on teaching money concept to the young kids.

Here's how we did in our family.

First, be friend with numbers
#1 Begin with numbers & counting.
How can a child understand money matters without knowing how to count 1,2,3 and simple addition or subtraction? So, start with counting with fingers, small pebbles, beans, biscuits etc, everyday objects can be the counting tool. Even Cherios cereal. :)

Then we made cards to teach them simple counting. 1+1, 1+2, 1+3, 1+4, 1+5, then proceed to 2+1, 2+2, 2+3, 2+4, 2+5. We never rushed it when my little boy was under 4 years old, just kept the counting under 5, and only 1 set of numbers at a time. When he is used to the concept of addition only we gradually introduced him to larger number like 6,7,8,9,10.

#2 Introduce them to coins and notes
When my little one was around 2-3 years old, we used coins for sorting game; 5¢, 10¢, 20¢ and 50¢ all comes in different sizes. Then I introduced them the value of each coins, which is more and which is less. Notes can wait till 4yo onward, you know, when I have the assurance that they are not interested in tearing paper anymore.  :)

#3 Get a piggy bank, cultivate habit of saving
Start by learning to save and that the money saved can be used to buy things they like, so in a way it's delay gratification - they have to wait till it's time to get their reward. 

I give my little boy whatever coins I had in my pocket when I got home from work, and he will happily drops the coins into his piggy bank. 

I used to own those traditional porcelain coin boxes when I was a child, and every new year eve my mom will break the coin box with a hammer, I would then excitedly count my fortune and bring them to the bank. I still recall those moments when I peeked into my bank book balance and feeling happy that I just got richer. :)

** never leave the little ones alone with the coins as they can be chocking hazard **


Make it Fun
#4 Introduce books & number games

We got few sets of books and card board games at home. From the puzzle maths game from Toy R' Us, to the book / games on concept of Money as part of our Phinken education series. All these trained little ones to do mental arithmetic where counting is done without using paper & pencil. It took time to train but we always make it fun.

#5 Monopoly! What better games to introduce concept of money to little ones than using the good old monopoly game? Apart from the classic game, there is a children version and also localised Malaysian version (with name such as Kedai Telekom or Indah Water). Whichever your choice is, Monopoly is a great game to teach the concept of money (buying, selling), basic of investment (property renting, upgrade, tax etc), and that life is full of uncertainties (the Chance and Community cards, arrgg... I always have bad luck with those!)

My little boy loves the Monopoly game and he is a much prudent investor than I am - he will count the amount of cash he has on hand and choose the property selectively. Soon he will be a smarter investor than the parent (or I certainly hope so) 

Make it REAL

#6 Take them grocery shopping
Prepare a shopping list, write down clearly what are the items to purchase and the quantity. Let little one picks each item for you. It's a good chance to teach basic skill like reading the price tag, checking the label for the expiry date; It also gives the little one a sense of responsibility by helping to carry out the chores and understand the value of our groceries. 

My boy will be helping to "hunt" the listed item whenever we do our grocery shopping, it's like a mission to him. From rather lost and slow in the beginning, he is now having better understanding of each section (the supermarket's layout) and can locate the items much faster. Each time he cross out an item on the grocery list, he was grinning in pride. :)

#7 Get them a wallet
What better way to empower by entrusting little one with a wallet? Yup, I made a kid's wallet for my little boy, completed with coin, card and notes compartments. Of course you can always buy one for your child. The point is, let him feel the ownership & responsibility of looking after his own money. I let him pay for simple purchases like bread, a doughnut etc, where only small change are involved and he only has about RM$7 in there - mixture of RM$1, RM$5, and coins. Initially he was rather nervous, but he is getting much at ease now that he is able to handle the counting a lot better. 

So, that is all about it, folks. The tips on teaching money concept for young kids. 

If you have successfully introduced all the above to your little ones, continuously teach them to handle money matters in real life. It is better they make mistakes early in life under our guidance, than making mistakes later in life when it is beyond our knowledge, right? 

Do share with me on the methods you apply with your kiddos, I would love to hear from you!


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