Teaching Children about Money

I remember the first time that I sat down with Robyn to talk about money - she'd just come to live with us and was about 3 and a half years old.  She really was a bright and thoughtful child, but she had one habit that we really needed to break... when she went to the restroom she used copious amounts of TP.  Telling her that she needed to use just a few sheets, asking her, threatening her...  none of these strategies worked, so I finally took out our penny jar and had her help me count out two hundred pennies and told her that each square of TP cost 1 cent ... we talked about how every time she tried to shove tp down the toilet she was using up real money.  Once she saw how fast her stack of pennies dwindled from the huge stacks of two hundred down to virtually none, she had a clearer picture of what she was doing...

The next step was to put those 200 pennies back in a jar and tell her that if she didn't use up the whole roll of TP in a week, she could have those 200 pennies to keep and save and that I'd exchange them for 2 one dollar coins (we were in Canada after all).

The next step was finding a goal... something she wanted to turn those dollar coins into... and I honestly can't remember what she started saving for, but the deal was that one of her two coins was saved and the other one she could take to the corner store to buy a treat. 

At three and a half, she was already savvy enough to have this conversation and start to learn about spending and saving ... of course as she gets older, the conversation has grown to include more and more layers of complexity and understanding, but by starting with a concrete problem and a visual win-win solution, we started Robyn on the path to financial understanding.  Turning an obstacle into a teachable moment can be a great way to start the conversation.  This article on How To Teach Kids About Money has even more ways to incorporate talking about money and finances with your children.

Disclaimer: This is a campaign with information sourced from Genworth Financial.