Children start learning at an early age, and you can help teach your kids about economics by providing them with some simple tools, books, lessons, and real-life examples. It’s never too early for children to learn about work, saving money, and investing in their future. Here are some great ways to introduce your child to economic lessons.
Teach Them About Currency and Uses of Money
You can start by making them understand the meaning of currency and how to use it in buying things. Then, teach them how to use their money to buy simple things like cereal, ice cream, school supplies, toys, books, etc. Finally, if your child wants something special, you can teach them how to save up for the item themselves or with a friend or family member by teaching them about savings accounts.
You can make learning about economics easier by sorting through your child’s piggy bank and giving out the money to help them get what they want, encouraging them to save money for important/expensive items.
You might even do this with your child’s allowance, so they learn about earning and spending money just like adults. It also helps to provide positive incentives for saving money, such as giving a reward for all the savings they made or the most useful/enjoyable purchases at the end of each month. After all, this is how interest works, more or less.
Educate Them About Work
Teach your children about the value of work, and never reward them for doing something unless they’ve done it with all their effort. It will help them eventually understand that they need to work hard and show proper dedication if they want rewards for something.
Also, teach your kids that work – any type of work – should be rewarded. While parents don’t usually pay the children for house chores or errands, they should offer some positive reinforcements for a job well done, even if it is a trivial, daily activity like washing their plate after lunch. Being appreciated and rewarded for your work – even if it involves only spending time – is an essential aspect of economics that many people don’t appreciate.
Help Them Create a Saving Box
It’s great to teach children the value of having a savings box where they can put the money they earn – their allowance and gifts or entrepreneurial projects like selling cookies and lemonade. It will help your child understand the difference between spending and saving.
A piggy bank is a great way to do this, as it reinforces the idea of saving money and spending them wisely. If you encourage your child to spend all their allowances on sweets and treats, they will never learn how to save or invest in the future. The piggy bank will help them understand that they need to save money to buy things they want later.
Take Them to Shops and Markets
Children learn from observation and by watching the adults around them. Most shops will have child-friendly areas where you can introduce your kids to the world of economics. The real-life learning experience at the shops is part of the middle school economics curriculum that children will benefit from later in life.
It may seem a drag to bring young kids to the supermarket, but they will learn by seeing and doing better than the school can teach them. They will learn basic math concepts (adding, calculating change, etc.), about wholesale products and their advantages or disadvantages, understand price-quality ratios, and even pick up some negotiating skills.
The more your child sees the more they will understand the importance of money and what it can buy, how to use it efficiently, and how to save it when possible.
Teach Them About Needs and Wants
Teaching your kids the difference between wants and needs is one of the best starting points. It will help them when they make decisions about what they want to buy. If they know they can only buy things if needed, they will learn the value of saving their money.
You can play Monopoly with them, a board game known for making it interesting regarding investments, saving money, real estate, and “doing business.” It is good as it reminds them of the basics of economics by teaching them about capitalism and how to practice with money. They will also gradually become more independent, which is great for children when they are so young.
As they grow, you can introduce them to books and educational software that teaches them more about spending/saving money but more abstract concepts, theories, and practices related to economics. You will see your kids becoming investors and asking about the stock market in no time!
Bottom Line
As a child is growing up, they become more independent. Teaching them about economics early on helps them understand the value of money and how to keep it safe. It will help them learn how to make money, save it, and eventually how to make money work for them later in life.