NOTE: This method can work for children beginning at around age 3 – and can work through early teen years.
There are two key influences in a child’s life when it comes to money:
- Their parents
- The world around them
Who is more likely to help children have a healthy relationship with money? Ideally, it would be the parents!
Here’s a way to help your child understand how to use money and to make healthy choices with it: Create a Money and Store System
Money and Store System
- Create your own money (call it a fun name like Mommy Bucks or Reward Dollars) – Here’s some money I’ve made to help you (DOWNLOAD HERE)
- Establish a system where your child can earn this money
- Purchase 3 or 4 items you know your child would enjoy and place it in a “store” at your home
- Assign a value to each item
- Watch the system work – and use the experience to create “teachable moments” where you can have incredible conversations with your child about money.
Consider a parent with a 4 year old boy.
The parents create a currency called “Super Duper Money” (SDM for short). To earn this money, their child must complete special age-appropriate tasks around the house such as:
- “Pick up pine cones out of the yard”
- “Feed and water the cat daily”
A value of $1 SDM can be earned each week for each key task.
The store has 4 items in it – with varying prices to create short, medium, and longer term goals:
- Gummy Worms (Price: $2 SDM)
- Give food to the Hungry (Price: $4 SDM)
- Legos (Price: $8 SDM)
- Big Fire Truck (Price: $16 SDM)
As the child performs the tasks and earns SDMs, they can make a purchase from the store.
It’s that simple, and it allows the parent control the conversation. Imagine the incredible teachable moments that can happen:
- Saving As they save money, they can accomplish more.
- Giving They can learn to sacrifice a gift for themselves to serve those in great need. There’s NOTHING like seeing your child be generous!
- Delayed Gratification The importance of saying “no” right now, so we can say “yes” to something more important later.
- It is a good thing to work! I want my child to learn the value of working.
This post is part of a Kids & Money Series here at the wildly popular JosephSangl.com. Click HERE to read all of the posts in the series.