Penny Savers: Teaching Preschoolers about Money

Amy Rees
May 27, 2014

Much as we try to shield our preschoolers from the daily news as presented on screen and in print, we also wish to help them understand some everyday events that have real impact on even their own little lives. And the truth is, whether they understand it or not, their worlds have been affected, profoundly or nearer to the surface, by today's financial realities.  

So, best that they understand a bit about money, no?

First of all, learning about money is a great way to hone early math skills. Both coins and paper money jump in tidy "by five" chunks that provide the foundation for addition and subtraction skills that elementary school will teach. A money-obsessed three-year-old sounds indescribably awful, but a happy preschooler who has a working understanding that jobs make money and money saved pays for things, and who can help sort the contents of a coin purse? Well, that sounds like a pretty Savvy kid to us!

From our essential parenting guide shelf, Jane Nelson and her co-authors of Positive Discipline A-Z tackle the idea of an allowance (which, by the way, they delineate sharply from responsibility for chores) and remind us: "During family meetings, have periodic discussions about money where you share some of your mistakes with money and what you learned (without lecturing or moralizing)." They suggest starting off the under-five-year-old set with ten pennies, a nickel, a dime and a piggy bank, and then adding a few additional coins per year. At five or six, they start a savings account with those coins and keep a running wish list. 

The National Credit Union Foundation offers fantastic, free materials about teaching preschoolers about money, starting with spending vs. saving and tips about how to talk about money (with ground-rule-setting reminders like how to reassure your child that you'll always take care of the basics for him and how to drop the money talk once the teachable moment is over).  There is (be still our library-loving hearts) a great book list of kids' stories that touch on a wide range of money issues, often quite elegantly. There is (be still our list-loving hearts) a list of seventeen things a five-year-old should know about money

Time to get cracking!  But how, again?  Perhaps you and your little one could make your own piggy bank—or perhaps a homemade frog bank is more her style. 

When you're passing a rainy day at home, you could roll pocket change together—and then deposit in frog, piggy or the FDIC-insured type of bank.  And when you are waiting in a doctor's office or an airport lounge, your little one could practice sorting coins.

Got a little one who is really getting the hang of this money-in/money-out system of ours? The Teaching Cash Register is a wonderful toy.  It combines some serious math and number-based learning with a ton of fun and imaginative play. Your little shopkeeper will learn basic math and money skills as she uses the electronic coin identifier, rings up sales, scans pretend credit cards and coupons or plays the multi-level math games prompted by the register. Because its levels increase in difficulty as the child gets more advanced, this is a toy that both your three-year-old can tinker with and your five-year-old can really work with. They can use it to run a pretend cafe, and maybe they'll be willing to bring you a cup of tea while you read in the corner, just to add to the realistic effect!

Don't forget, that'll be $1.50, ma'am!  A money-Savvy kid frowns on I.O.U.s!

From the Parents

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