Wednesday, October 2, 2013

Ensuring that a Child is Financially Aware

It seems that in our high-tech, easy-spend world of immediate gratification and excessive debt, children are being brought into this world with lesser and lesser chance of getting a good financial upbringing.  This is why I’m making it a point with my own children not only to try to educate them regarding financial values but to ensure that those around them are attempting to do the same.

With a five-year-old and a newborn, my work is ongoing, but I feel as though I’ve been reasonably successful with my attempts from my progress thus far.

Financial errands
I’ve found that when a child is still willing to look at the fun side of running errands, this can be a great time to start slipping in some financial education on the side.  Taking our five-year-old along with us on trips to the bank, coin ship, garage sales, grocery store, and similar excursions are interesting to him and are activities that we can use to point things out and teach him more about personal finance.  He really looks forward to our trips to these places now, which tells me we’ve been successful in making him more financially aware.

Here are just a few examples of how we have furthered his financial education with these tasks: 

  • Grocery store – Pointing out prices of the foods we buy each week
  • Grocery store – Price comparing among similar products
  • Grocery store – Showing him how to pay at the checkout
  • Garage sales – Buying/selling unused or unwanted items for pennies on the dollar
  • Garage sales – Negotiating tactics to get better deals
  • Bank – Explaining how the banking system works
  • Bank – Starting a bank account
  • Bank/Coin shop – Buying him various coins and bills to further an interest in money
Such tasks are often commonplace to us as adults but they can serve as valuable learning experience to young kids.

Gifts from others
I’ve found it more difficult to get others involved in helping me with our kids’ financial educations.  Family members often want to give toys and trinkets in place of financial gifts when it comes to holidays or birthdays.  However, over time, and through our own efforts, we’ve made our son financially aware enough that he illustrates his value of money when around family members.  Seeing this, our family realizes that he appreciates and likes money and has therefore started giving him gifts related to money.  European coins when they come back from a trip abroad, a bag of change cleaned out from a vehicle, an 1888 Morgan Dollar for his birthday, and similar gifts have started to roll in as he gets older, telling me that others have taken note of our son’s financial awareness.

The value of penny
Many people just don’t value a penny anymore.  We find these coins all over the ground around town and people just walk right past them.  This is fine with me since our son picks them up, a key indicator that he still values a penny.

We find this an important aspect of ensuring that he is financially aware, since it is a building block to his future.  Since we know he values the lowest denomination coin, he will value higher denominations as well.  This has led to interest in wheat pennies and other coins, furthering his appreciation and value for all money in the process.  If we started him off only valuing dollar bills, he might waste a lot of money in coin form along the way, possibly adding up to hundreds or even thousands of dollars throughout the course of his lifetime.

Many adults don’t really value coupons anymore, so it can be hard to expect kids to appreciate their worth.  And the true value of coupons might not hit home until they are applied to something important to child or adult alike. 

We have found that our son is quickly learning the importance of coupons though by way of the local go-karting track, a favorite stop of his.  We take a “buy 2 rides, get 1 free” coupon with us when we go.  So our son understands that we get more for our money this way and he is now on the lookout for such coupons and super-excited when we find them.

We make no secret of using coupons in front of him so that we continue to build upon his understanding us such financial tools.  And in this way we know that he is financially aware and we keep furthering his personal finance education.



The author is not a licensed financial or parenting professional.  The information provided in this article is for informational purposes only and does not constitute advice of any kind.  Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.

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