Do you ever feel like your kids don’t understand how hard you work to buy them their new game, baby doll, or in my case, so MANY Barbies? This is how I feel ALL THE TIME … that they think that money grows on trees. If I am being honest, sometimes it is my fault. I will easily give a reward for doing something great at school, not having an accident, or doing everything asked for a week. We aren’t at a point where we do chores, but they are expected to pick up after themselves. (How can kids make such a mess in such little time?!)
The CPA in me needs them to understand that money does not, in fact, grow on trees (although sometimes all of us wish we could go shake a money tree from time to time). So lately it has been really important to me for my girls to understand what things cost.
Obviously, kids, or at least my kids, do not fully understand the concept of money and that my first job ever paid $6/hour. I would have to work 4 hours after taxes to be able to buy that Barbie. My girls are 6 and 4, so if we are at the store and they ask for something, I explain how much it costs like “this is $15” and also explain in a way they can comprehend. For example, this toy is equal to buying two Barbies or baby dolls. Usually, this works for us and they say “that’s a lot.”
Sometimes they really want it, and we take a picture so it can be asked for as a present for their birthday or the next holiday. It allows them to have a wish list and know that we cannot forget something that they love. It also help us when friends ask for present ideas. My husband and I will compare what they had each of us take pictures of to see if there is consistency in what they “needed.”
One time my daughter absolutely couldn’t wait, and we left the store and went to pick up her money to pay. She loved it more because she paid for it, and I knew she really wanted it because she was willing to spend her money. Let’s just say she likes to put her birthday and tooth fairy money in her bank.
All of this to say, teaching financial literacy from a young age is a skill that will be with them forever. Some other great ways to teach young kids is to play games like Monopoly or Life where you have to budget and strategize during the game. I also find it is important to talk about money. My parents were always really open with my sister and I if there was no way we could get something, and I want to be the same way with my girls. We are currently really in saving mode and have the girls on board and excited for what we are saving for. That allows their buy in and has resulted in being asked for far less, especially when we say “don’t you want to be able to get x thing one day?” We have found something that works for us, and I appreciate that even at their young ages, they are involved.