Wednesday, September 14, 2011

Teaching Your Child About Money

It's very important to my husband and me to teach our daughter to be fiscally responsible.  We've been giving her an allowance for about 2 years now-just a small amount, to help her start to understand money.  She has three piggy banks.  The biggest one is the "Saving Piggy", the middle size is the "Giving Piggy" and the smallest is the "Spending Piggy".  Each week, when she get her allowance, she divides it between all the piggys.  We don't tell her to apply it, but we do discuss her decisions and help her "remember" what each piggy is for.  Anything that goes into the Saving Piggy, stays there.  The Giving Piggy money gets used for things like her school's food and toy drives, and her Spending Piggy can be opened to buy anything she wants, anytime. 

It's a process that's worked very well for us.  She loves opening up her Giving Piggy, taking the money store, and buying toys for underprivileged children.  It means so much more to her because she's using her own money.  My heart melted last year, as she was making her purchases and told the clerk she was helping Santa out and buying toys for children who weren't as lucky as she was.  (We told her that Santa comes and picks up the collection boxes and delivers them.)  I think the clerk got a good dose of the Christmas spirit that day.

She's really surprised me with the use of her Spending Piggy too.  She's careful about purchases and watches her budget.  Even though it kills me, I won't make-up the difference if she doesn't have enough money for something she sees.  We talk about saving up for it next time.  She knows she has to make her money go a long way, and I often see her debating over two small toys versus one large item.  She even brings her money to the Farmer's Market and buys herself flowers and little cakes sometimes.  So cute!

If you are looking for more information about how to teach your child about money, I would recommend looking at these websites: (click on "free resources")

Some good children's books are:
Alexander, Who Used to Be Rich Last Sunday
The Berenstain Bears' Trouble with Money

Next on my list is to buy some games.  When I was little, I played Payday all the time, and I think I really did learn something.  I've also heard good things about Loose Change and Learning Resources Money Bags A Coin Value Game

How do you teach your child about money? Can you recommend any tips, books, or games to me?