Money Management for the 7 and Under Crowd

Money Management for the 7 and Under Crowd

Like most families, we have been taking advantage of summertime to explore Chicagoland, visit with friends...even take a few short getaways. While we've certainly had enjoyable experiences, I don't think my little ones fully realize that traveling from here to there (seemingly everywhere) costs money. Though they are only 5 and 7 years old, I feel it's important to start teaching them about the value of a dollar, the importance of a good work ethic, and delayed gratification.

We've started with delegating simple chores to each of the kids throughout the week. We also have "Super Saturday", which typically involves some loud 80s music and everyone taking a room to clean - vacuums roaring, brooms sweeping, and rags dusting. While they each have "Porky", the pink rubber piggy banks that they use to sock away pennies and dollars earned, that money seems to be quickly spent on the latest Lego kits and Barbie dolls. In a culture of keeping up with Joneses' and consumerism, how can we teach our kids to appreciate what they've got and work hard for what they truly want?

I had a conversation with a friend of mine earlier this week about this very issue, while our kids enjoyed an afternoon of swimming together at a local beach. A former kindergarten teacher, she is wealth of creative ideas for getting kids engaged and keeping them motivated. She had a fantastic idea for helping her kids understand money management that has worked well with her 7, 5, and even 3 year old this summer.

It starts with a bunch of plastic gold coins - the kind you get for pirate-themed parties for kids. Each child then gets a plastic cup with their name on it.  As they do a small chore around the house (folding laundry, sweeping the floor, cleaning up dishes, putting away toys - whatever is age appropriate), they earn 2-3 gold coins in their cup. Once they've collected 25 coins in their cup, they can "cash" the coins in for 1 real dollar. If they are disrespectful, have argued with each other, or have just had overall poor behavior, she takes 2 coins away from them. So, not only does this method teach them the value of working for a dollar, it also helps them understand immediate consequences for poor behavior. The fact that coins need to be cashed in for real money also helps them understand delayed gratification. If they want something for $10-$15, it will take saving up of many gold coins and cashing them in for real money.

I overheard her kids talking to my kids about it, and it definitely got my kids interested - so much so, that they've been asking for some pirate coins. We are going to try and put this plan into action in the coming weeks and see how we do.

Do you have any ideas that have worked well for teaching kids a good work ethic and the value of money? If so, please drop me a line or share your comments.

 

 

 

 

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  • Thank you for addressing the need for financial education under 7. It is my opinion that kids start to learn about money as early as 3 by watching their parents and their relationship with money. I have been a financial advisor for 20 years and just wrote a book for children around save, spend and share. Here is my website www.theheavypurse.com . Shannon :)

  • In reply to theheavypurse:

    Hi Shannon, Thanks for sharing a link to your website. I'll have to check out your book, as I hope to instill some good saving and spending habits in my children!!

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