Economics Education Just Makes Cents!
In a country where two-thirds of all young people are in debt, the need for early economic education is evident. Research has shown that economic understanding is a developmental process and most children have misguided views of the economic world.
So at what age should children start learning about money? As soon as they can say ‘I want.’ For young children connections between money, work and goods can be made simply by saying things like “I have to go to work so I can get money and I need money to buy food for us.”
Opportunities for economic education are everywhere. When you’re grocery shopping, let your child count the money in your wallet. Actually touching the money gives her a better understanding of the physicality of money and how quickly it’s spent when items are added to the cart. When she gets a little older have her keep track of the total amount of the items in the cart.
Has your child outgrown the little duckies on the wall? Let her be an active participant in the redecorating. By giving her a budget for the project you force her to make financial decisions such as “Do I get the expensive new bed or do I scale it down so I can get that cool chair?” Budgets teach sacrifice and sacrifice is one of the most important things to learn when it comes to money.
Allowances are not only a great way to get your child to help out around the house, but they also offer a lot of valuable learning opportunities. Give your child an allowance in various forms. One week give him cash, the next all coins this allows him to understand how money adds up. Also, try experimenting with credit. Next time you’re at the store and your child is begging for that candy bar, explain to him that he can get it now and that his next allowance will pay for it. Save the receipt and come allowance time sit down with him and explain again how his allowance has gone to previous purchases.
Money Ed Boxes are a great learning tool for allowances. These colorful boxes are divided into four parts: giving, living, saving and wealthing. The giving compartment is for things like charity or church, the living is for day to day expenses, the saving, for short term goals such as a new video game, and the wealthing is for long term saving goals like a car. The giving and living compartments are on hinges while saving and wealthing are screwed down. Money Ed Boxes are much better than the traditional piggy bank because is teaches kids that money should be divided rather than added to a lump sum. Take advantage of this opportunity to teach your child the rule of saving which is 10% of your income should go into savings.
A common practice for economic education in classrooms is a mini-economy simulation. Kids buy and trade resources while they set-up businesses and then compete for customers. For at-home learning a good substitution is the board game Settlers of Catan. In this game players compete for resources and make deals with the bank while they attempt to build cities and roads. Settlers of Catan is best for older kids rather than younger because of the complexity.
Visit our pretend bank in Town Square to give your kids a glimpse into the world of banking. Our bank has a teller’s window, vault and even a counting ATM! It’s a great way to show them that the bank has a purpose and isn’t just another boring errand.
Take advantage of everyday opportunities so you can put your child on the road to success. Economic education for children helps to make fiscally sound adults.
