How do you help young kids, such as 4-year-olds, understand the value of money? It seems like my son is too young to really understand, but he also wants to buy things. How do you start?
The Value of Money
You start by asking the question, just like he’s starting by asking to buy things, so, mazel tov — you’re both on the right track already! I wrote a column a few years back about teaching hypothetical kids about money, savings and tzedakah (charity), and maybe some of those suggestions will still prove helpful to you. But since you have an actual kid with actual desires, your methods will need to be more concrete.
First, think about how you learned about money as a child: Did you get an allowance? Did you parents talk to you about money? Did you get new things just by asking? Did you earn them? How did you learn what things cost?
Then, think about what messages about money you’ve already sent to your son, and what messages you want to be sending: Do you buy things for him easily and without guilt? Do you tell him how much money you spend on things? Does he see you deliberate about purchases you make for yourself or for the household?
Finally, think about where he is developmentally: Does he recognize numbers and number order? Does he know the names of different coins? When he asks for things, does he understand the difference between holding something temporarily in a store and bringing it home?
You have to start somewhere, and taking him grocery shopping is a good entry point. Tell him how much things cost. Keep a running estimated tally of your total. Show him how to find the prices on items and do a number scavenger hunt to find prices on shelves. These age-appropriate activities will introduce him to the idea that numbers are associated with things.
If it’s how you shop, you can model choosing the least expensive item in a category, or you can share the decision-making process for how you choose which apples to buy. You can also introduce the idea of a budget by saying, “I’m not buying that today because I’m trying to keep our total cost to under $100,” or something else that can be relatively arbitrary but can introduce important concepts.
Make sure he has opportunities to hold and feel money, to give it to store clerks by himself, even to put it in vending machines or help you get it from an ATM. With so many purchases happening online or with credit cards, kids today are less familiar with actual dollars and cents than when we were kids. When he does want something, picking it out in a store is a more tangible experience than having it arrive in a box in the mail, just like paying with bills is more tangible than paying with a credit card.
Try giving him a dollar to spend in a store on a given day, or a regular 50-cent allowance to save for something bigger. Then check in: Is he getting the message you want to send about money? Is he asking for things in a different way? If it’s not working, tweak the system to see what he gets out of it.
Finally, if you do give him money in some format, try hard not to dictate how he spends it. An extra toy car or piece of candy might seem wasteful to you, but the overall value of the decision-making process is exactly how your son will learn about money in the long run.