Did you know that children start forming attitudes, beliefs and behaviors about money before they even start school? Early lessons about money can help build lifelong money habits.
Learning Starts at Home
Parents are the most important teacher in a child’s life. A study found that about half of the people interviewed said their parents talked to them about money as they were growing up. People whose parents talked to them about money did better on a financial quiz than people who didn’t have money talks at home as children.
A goal for many parents is for their child to be financially responsible and comfortable. Having healthy attitudes toward money will help teach preschoolers important early lessons about saving, setting goals, and choices about how your family spends their earnings. Even if parents don’t sit down and talk with their children about money, chances are children are still watching and learning. Through fun activities, play and reading, you and your child can begin to learn and build healthy money habits that may last a lifetime.
What Can Preschoolers Learn About Money
Think about the last spending decision you made. Did you have to plan, prioritize, or even save and control impulse spending along the way? There’s a lot that goes into managing money. Research shows that children between 3-5 years old are at an ideal age to start learning skills that could help with long term money habits.
Planning: Preschool children can understand the idea of delayed rewards, such as finishing work before playing or getting a reward only after something is done. Making a choice and comparing what is good and not so-good about their choices helps preschoolers learn and practice decision-making skills.
Money: At a very early age, children start to figure out that you need money to buy things and that some things cost more than others. Parents can talk about how people use their skills and time to earn that money. As children learn about counting, sorting, and patterns, that’s a great time to learn the difference between coins and paper money too.
“Me”: Preschoolers are busy learning about themselves and their place in the world. Ask any parent who has ever
had a 2-year old tell them “no!” Young children are beginning to learn self-control, flexibility, and follow through. These are all important skills for setting—and sticking with—personal money goals.
Fun Money Activities
Make a Piggy Bank. Your child can make their own piggy bank using a clean empty food tub or plastic jar. Use craft items and scrap materials from around the house to decorate it. Let your child find a special place to keep their new bank.
Have a Scavenger Hunt. Hide a few coins in your home and let your child look for them. As your child finds money, you can tell them the name of each coin and let them add the coins to their new bank. Young children can learn to sort the coins into patterns, such as all pennies or nickels, or all brown and silver coins. Children older than 5 years start to
learn that each coin is worth a different amount of money and can practice adding up their coins
Make a Savings Chart. Making a chart will help your child think about and keep track of something he or she wants. It might cost money or it could also be for a special treat, like having a friend over. To make a chart, draw as many boxes as your child would need to earn in coins or stickers for special chores to reach the goal. Your child can color in the
boxes as they add coins to their bank, or add stickers to the boxes as they are earned. When the boxes are full, celebrate reaching the goal! (Parents can make a goal chart too.)
Tips for reading to your child
- Hold the book (or have your child hold the book) so that all of you can easily see each page.
- Have your child guess what happens next.
- Talk about what people in the book do with their money and the decisions they make.
- Ask, “What did you like about the story?”
Recommended Children’s Books
Below are just a few of the children’s books that have a financial lesson. Some libraries may even have a parent guide that will be given to you when you check out the book.
- Jenny Found a Penny
- Make Money! Have a Lemonade Stand
- Just Saving My Money
- What’s in the Piggy Bank?
- Give It
Visit the website https://finances.extension.wisc.edu/programs/money-as-you-grow/ or ask your local librarian or UW-Madison Extension office for more information on the “Money as you Grow” program.
Reading About Money
Reading can be a fun way to learn about money. Books can help start positive talks about goals, saving, and spending.
To $um it up
- Preschoolers can learn skills that will help them handle their money well as adults
- Family activities can spark talks about earning, saving, and planning
- Reading books with stories about money is a fun way to talk about spending and goals.
- Talk about spending decisions at the store to make the most of those everyday money moments.
Want to Learn More?
- Visit our website for more financial education resources. https://finances.extension.wisc.edu
- Contact your local Extension Educator: https://counties.extension.wisc.edu
- For help with balancing your monthly spending plan, contact the nonprofit National Foundation for Credit Counseling (NFCC) at https://www.nfcc.org or 800.388.2227.
The University of Wisconsin–Madison Division of Extension provides equal opportunities in employment and programming in compliance with state and federal law. You may request materials in an alternative language and/or format to make them more accessible. Contact us at finances@extension.wisc.edu. Services are provided at no cost to you.
