Welcome to another edition of Financial Friday. A series of weekly posts where we share some financial gold with you on our personal finances, savings, and investing. Once again, these are just things we have done ourselves and might not work for you, but it doesn’t hurt to try a new way to pan for your own financial gold!
Kids are fascinated by many things and for each child it could be completely different. For some it might be toy cars while others love empty boxes. Others love playing with dirt and some cannot get their hands dirty. But there is something that all kids seem to love and that is money… well specifically coins.
For PFG boy, this is no different. From the time he was two and his grandparents started giving him coins for charity or giving him the change from a purchase at the store, he has been hooked. When he was younger, he would call all coins his monies and would try to see how many coins he could hold in his chubby hands.
As he grew up, any coins he saw were his monies; even the spare change dish at my parents house. The funny thing about kids is that they don’t discriminate about money. Any coin for them is magical and it doesn’t matter the true value of the coins. They just want more and want it all… I have heard this doesn’t change when they get older either.
As PFG boy has gotten older, we have thought about new ways that we can teach him about money with some successes and some areas where we probably need to wait until he is older. Below are two examples of things that have worked so far.
Experiencing Money at a Young Age
In Colorado, we are lucky to have an amazing bank specifically for kids. This bank called the Young Americans Bank is run by the Young Americans Center for Financial Education. The bank is specifically set up for kids to learn how to set up their own bank accounts, apply for loans to start their own businesses, learn how to serve on a bank board, and much more. While PFG boy is still on the young side, Young Americans Center has other opportunities for him to participate.
This December, PFG boy and I attended an entrepreneur fair hosted at Young Americans Center. Kids of all ages where selling products that they had made and showcasing their creations. For PFG boy, who was 3 at the time, this was great. He could run around and try out new things. But as is the case with most 3-year-olds, he wanted everything; especially all of the cupcakes.
As we walked around, I took out five dollars that he “earned” and had kept in his piggy bank. This was the money that he could use to buy items for himself and for gifts for Mrs. PFG for her birthday. While he didn’t understand the true value of a dollar, he was so proud of himself when he handed the “sales person” the money and asked for a receipt.
This small experience in a safe environment allowed him to buy things that he wanted and he gained the knowledge that money is not endless. We have done this in other places like Target where he purchased a new toy.
Note: As an elementary school student, I participated for a number of years in a program they host called Young Ameritowne where you learn how to write checks, go to the bank, run a business, earn a paycheck, and shop at stores. Local businesses sponsor these storefronts where you gain life lessons that cannot happen in the classroom.
Going Beyond the Regular Piggy Bank
While at the Young Americans Center, we were given a brand new piggy bank for PFG boy to use. This piggy bank unlike others has slots for saving, spending, investing, and donating. Initially, PFG boy was so excited to fill up all of the slots and emptied his piggy bank into all slots without thinking where the money was going.
However, he quickly grasped that he wanted to fill the slot where he could buy new toys. As he continues to get older, we will work with him to understand the real value of each slot so he understands that some money should go into each slot.
Additionally, we have started the 52 week challenge with him where he puts money each week into the savings slot. He will be able to use this money at the end of the year on gifts for the holidays. Each week he is putting in a penny per week so he is on 13 pennies this week.
We look forward to continuing to work with PFG boy and PFG girl to learn the true value of money. As they get older, we will have them set up accounts at the Young Americans Bank where they will be able to participate in the many programs and services offered. If we can teach them when they are young, we will help set up a healthy way to look at money for the future.
How do you teach your children about money? Are there tools that you use that are better than others?