I constantly have to remind my two little ones that money doesn't grow on trees. Every time we walk into a store they get a serious case of the "gimmes." It doesn't matter to them if they just got a new toy earlier in the week. Needless to say, I'm fighting the good fight (despite some public meltdowns in Target!), in an attempt to teach the kiddos about the importance of money--and how spending and saving works.
Luckily, I've got a little help from mom and financial expert Radha Rai. As the author of Liktoon’s Boat, a new kids' book that seeks to promote early financial literacy Rai is passionate about fostering money-smarts. That's why she encourages starting the learning with play! Here are her top 3 ideas to help you start this conversation in a fun way.
- Create Play/Pretend money: You could use monopoly money or coins, but it’s fun to create money out of crayons and markers! Important part is that you make coins of different sizes and shapes for different denominations (coins are different sizes and shapes and even colors!). Then involve kids in writing values on the various coins and bills. If your kids are comfortable with adding non-5s and 10s, then include such bills ($1 for example) into the mix as well.
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- Let the kids be the shopkeeper [30 mins – 1 hour]: They have already seen you shop. Now give them a taste of what kinds of decisions a shopkeeper has to make. Make a shop out of their toys. Ask them to attach a price to each toy. Discuss: why a certain item is more valuable than other (this teachesthem the concept of value – a small item could be extremely valuable compared to a large item). You should also set a goal of how much money the shopkeeper needs to make to win. Negotiate while buying the toys. Push them to understand negotiation applies to shops as well. At the end count the amount of money they made. Offer them a cup (or more) of ice cream / dessert if they reached their goal.
- You be the shopkeeper [30 mins – 1 hour]: Your kids have seen you shop in stores. The problem with letting them observe fixed-ticket buying behavior in stores is that they do not learn that negotiation applies to money transactions. In this game, give them the taste of what it takes to be a shopper. Have a clear budget. Within the budget have a clear list of items they need to buy. Keep the prices as multiples of 5s and 10s if the child is not yet comfortable with complex prices (remember to focus on money and not get caught up with the math). Ask them to estimate how much money will be needed to buy everything on their list. Now ask them to shop. Let them ask questions. Consciously mark prices in such a way that their budget doesn’t allow them to buy everything. Keep a pencil and paper to track the kids overall spend and savings. Encourage them to negotiate. In the end look at the estimation and discuss how they can estimate their budget better.
Radha Rai is first and foremost a brand new mom, financial professional, community volunteer, author and entrepreneur. She was born in Bihar, India where the illiteracy rate is very high amongst girls. She had to go against the societal grain to get herself and her younger siblings educated. Her new book, Liktoon’s Boat is an endearing and educational book to help promote financial literacy among children.
This is not a sponsored post.