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Feb 4, 2012

Help Your Child to Save Money

Children can learn about money as early as age two. They watch as you pay for things, either with cash or an ATM card. They learn constantly and money management can be incorporated into everyday events. Remember that short lessons are best as preschoolers have a short attention span.
Your children are watching you. Setting a good example will likely provide the strongest lessons as you are aware of the messages that you are sending about money. Here are some fun ways to teach your young child about coins and money.
Sort Coins by Color
Begin by differentiating pennies from silver coins. Pennies are easily understood as children learn how to count. Practice counting out 10 pennies at a time.
Sort Coins by Size
As your child gets older and understands more, work on the difference of the silver coins by grouping the coins by size. Even though children learn the sizes, learning that a dime is worth more than a nickel is a hard concept for very young children.
Practice by pretending to be a bank and exchanging money in the different denominations. Another pretend game to practice is to operate a store where your child can buy his own toys.
Recognize Opportunities
Keep your eyes open for moments that can reinforce your teaching. Buying groceries, clothes, or eating at a restaurant and leaving a tip are all great opportunities to explain to your child what you are doing and why. The best learning opportunities are just regular day-to-day activities.
Use a Piggy Bank
Introduce the concept of some sort of container that is only used for saving coins. You may want to consider a clear container so it's easy for your child to see how much is in his piggy bank. Periodically, open it and count the coins. Let the child see how it grows
Use a Coin Counting Machine
If the child is older, consider buying an inexpensive coin counting machine. Unloading the coins from the piggy bank is a fun way to practice sorting and counting. You can also teach the relationship of the different coins.
Introduce Paper Money
Once your child has mastered coins, it is time to introduce paper money. In a child's eye, coins are probably more valuable than paper money. Over time they'll begin to understand the relationship.
Use Money Related Toys
A toy cash register is a great gift for a three year old to practice learning about money. You can also emphasize the value of toys when at the store. Each time your child sees something he thinks he wants, point out how much it is and how many coins would equal that amount.
Kids don't really like to save money. They want the things that money buys more than the good feeling of future financial security. To get the idea of saving money to stick with your kids, it should be part of a larger lesson about the value of money and being a smart consumer. Those may be heavy subjects for a young child, but there are easy ways to put the lessons in terms they can understand.
Kay Hedges is the author of tips and advice to parents who would like to teach their child to save money. Saving money is a habit that can be instilled in a child at an early age and forms the basis for other positive attributes as the child grows.