A couple months ago, a Facebook post went viral.  Someone had taken a photo of torn up money stating that it was a child’s allowance money that he ripped up because it wasn’t as much as he was told it was going to be.  Commenters went crazy giving their opinions on the matter and what they would do if that was their child.  But shouldn’t we be looking at the parent?  It’s the responsibility of the parents to teach their children the value of a dollar.  It’s probably safe to say that that child’s parents need to take a step back and start from the beginning in regards to financial education.

Here are some ideas, based on age, of ways to teach your children about money:

Ages 2-3

• Start by first teaching kids to identify each coin, explain that just because a penny is bigger than a dime, doesn’t mean it’s worth more.
• Play pretend shopping. Have them use the coins to “buy” household items such as cereal.  This starts introducing the basics of commerce and spending.

Ages 4-5

• Have them be in charge of coupon-clipping (with safety scissors.) Then go to the store and ask them to find the items you have coupons for.  Explain to them that the coupons save money.
• Have them sort through their toys and ask them to pick some to donate. Explain to them that toys cost money and not all children has the money and budget to spend for new toys, so it’s kind to share.

Ages 6-8

• If you choose to give an allowance for chores, take your child to open a savings account. Encourage them to put some of their allowance (and birthday money) in the account.  Explain to them that saving is very good and that the banks reward savers by adding to their money with interest.
• Start having them use their own money to pay for the things they want, i.e. that new Nerf gun. They will learn how quickly money can disappear and the difference between needs and wants.

Ages 9-12

• Teach them the importance of comparison shopping. Show them the price differences between generic and brand-name items and explain why one costs more than the other.
• Plan a garage sale and have them make a list of items in the house to sell. Put them in charge of organizing and pricing.

Learning the value of money as young as possible is very important. These ideas and activities are just a few ways to help instill the value of a dollar in your young child’s mind.  As your children get older, explain to them that money isn’t the most important thing in the world, but that it’s very difficult to get by without it.  Explain to them what might happen if someone goes to the emergency room but doesn’t have health insurance.  Gently describe to them what could happen if a parent doesn’t have life insurance.

The most important piece of advice though is to lead by example.  “Do what I say and not what I do” is a very common phrase, but children learn best by watching.  Remember, even if you don’t think they are watching or listening, they very well may be.  How many times have you heard a little kid say something he wasn’t supposed to?  And when you ask him where he learned it, chances are his response was “Mommy” or “Daddy.”  Now, obviously, the child’s parents were not purposely teaching him to say it, little Jimmy just overheard it.

These little ones are the future and it’s your responsibility to teach them.  It’s also your responsibility to protect them.  Term life insurance is affordable income replacement (one month’s premium is probably a lot less than that new video game!)  Life insurance is money when the breadwinner is gone.  Life insurance will ensure your child’s standard of living does not need to change if you are no longer around to provide for them.  Like most types of insurance, term life insurance is something you hope to never have to use, but are grateful that it’s there just in case.

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