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That Whole Money Thing!

3 Ways to Help Preschoolers Understand

Is preschool too young to start talking to your children about money? It depends. Most
3-year-olds should be ready to start learning simple vocabulary and basic economic lessons, like If you want to buy something, you have to pay for it with money, or, If you work, then you can earn money. Preschoolers are very literal, so the examples and experiences need to be very concrete. 

With your preschoolers, don’t expect too much. We want this to be fun, right? Little kids learn through play, so the number one goal with these ideas is to make them interesting. No worksheets, no memorization, and when they’re done, they’re done!

It’s important to view this as a chance to spend quality time with your kids, and let them learn a little about money at the same time.

1. Try hands-on arts and crafts.

Let your little ones decorate their own piggy banks. You can find ready-to-paint piggy banks at a dollar or craft store. They come in different shapes, and often with paints and a paintbrush.

If you don’t want to buy a paintable piggy bank, you can simply use a mason jar or even a well-washed pickle jar. Use construction paper, glitter glue, stickers, or anything else that strikes your child’s fancy. My 4-year-old loved decorating a construction paper label with her name on it, and completely covering her mason jar with stickers.

While you are decorating, talk to your children about the purpose of the piggy bank. Let them know they can use their piggy banks to save up money to buy something special. Keep in mind that to a very young child, something special may well be a pack of gum or a Hot Wheels car. Honestly, that’s great, it will be easy for them to save up that amount of money.

2. Start sorting and naming coins.

Many kids like to sort things, and coins are no different. Lisa Zambito, director of education at the Bon View School, reminds parents to start at the beginning. “Teaching money vocabulary would be a great first step with 2- and 3-year-olds. The words coin, dollar, and money may be new to them.” Zambito suggests that 4- and 5-year-olds could handle learning the names of and recognizing quarters, nickels, dimes, and so on. She adds that some kids this age would be able to sort the coins from a big pile and name them, and some may not, so try to have flexible expectations.

You might start with your child sorting the coins by color or size, and see how it goes. At this age, it is pretty unlikely that kids will be able to remember how much each coin is worth. As they turn five, it will be easier for them. You might incorporate some general comments about the value of the coin as you help them sort, but there’s no need to focus on it.

3. Make it a game.

Creative play is perfect for helping preschoolers learn about money. Set up a store and let your children pretend to buy their toys from you. Dig out some money from their piggy banks and use real coins. My kids liked to do the buying, so I pretended to be the shopkeeper. As the shopkeeper, I named the coins for them as we counted them out. They would bring up a toy to the counter, and ask me how much their teddy bear costs. Let’s say the teddy bear costs ten cents. I would name the price, and then help them count out ten pennies. Be sure to name the coins for them. I would also show them that they could use a dime instead because one dime equals ten pennies.

This sounds fun and easy, but trust me, most preschoolers are extremely literal. Understanding that those ten pennies are equal to one little coin will be beyond them. They won’t believe you. So don’t expect them to remember that a dime equals ten cents. In a similar sense, ask preschoolers if they would rather have a nickel or a dime, and many will choose the nickel because it’s physically larger.

By the time kids are in kindergarten, they will be able to really learn coins and identify their values. So if this game is happening with a mixed age group, don’t be afraid to change it up a little bit for the older child. For example, you might encourage the older child to take on the role of money counter at the store. We need to meet our children where they are from a developmental standpoint.

These ideas are not about creating a financial genius. Instead, they’re about laying the groundwork – the knowledge, habits, and behaviors – to understand and manage money. Perhaps most importantly, these are some fun ideas for you to explore with your kids.

Lauren Zangardi Haynes, CIMA, CFP (R) is a fee-only financial planner and founder of Spark Financial Advisors. She has three young children and a rambunctious puppy. Learn more about Lauren’s services at Spark Financial Advisors.
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