You might be surprised at the ideas your kids have already picked up about money. Most of them develop just by watching you. If you’re always at an ATM, your kids might think an endless supply of money is spat out of a machine in the wall. Or if you use EFTPOS, they could believe that a rectangular piece of plastic is all you need to flash at the supermarket to get the groceries.
These days, kids may hardly see notes and coins at all. For most of us, the days of bringing home a pay packet with a wad of notes inside is long gone. While you can still bank over-the-counter, many of us choose to manage our money electronically and online. And our wallets are full of plastic cards which we swipe in a machine to pay for the groceries, a pair of new shoes or the phone bill.
So, how do you explain the concept of money to your kids; that you have to earn money (well, most of the time!) and then use it to pay for goods and services.
Start at home when they’re young!
There are lots simple activities to do and games you can play that will help your kids understand what money is, its value and how it works.
Show them the money!
- Show your kids what different coins and notes look like. This will help them learn what money is.
- Gather a collection of 5-cent, 10-cent, 20-cent, 50-cent and one and two dollar coins for them to hold and play with regularly.
- Point out the different colour, shape, size and weight of the coins.
- Show them paper notes too – even the green $100 note that many of us don’t see too often!
Teach your kids the value of money.
Teaching kids about the value of money is a little harder!
- You can use the different attributes of coins (colour, size, shape and weight) to help them learn that every coin is worth a different amount of money.
- You can also use coins to play a counting game with kids.
- For example, show them how many 10-cent pieces make up one 50-cent piece.
- There are lots of different combinations to try. Work it out together!
- Show them what money can buy. But make sure you use examples that they can understand. For example, one dollar will buy one banana. Ten dollars will buy ten bananas. (Okay – maybe bananas aren’t that expensive. But you get the point!)
Show your kids how money works
- One of the simplest ways to show kids how money works is to take them shopping with you.
- Take the kids to the supermarket – skip the lolly aisle if you can – and let them watch (or help) select items off the shelves.
- Make sure you’ve got cash in your wallet. And at the check-out, let your kids hand the money to the cashier and count the change together.
- At home you can play “shop” with your kids. Use items from the pantry and take turns at shopping and being the checkout chick!
This article was written for Kidspot New Zealands leading parenting website. Sources include The Australian Securities and Investments Commission, Understanding Money.