Ask a young child about money and they will invariably have something to say. Most likely they will talk about how their parents don’t have enough of it or how they themselves want piles of it (to do what with? We don’t quite know). But even at a young age, most children have an inherent understanding that money is coveted, desirable, and holds some sort of value. But the value is vague and abstract and sadly, many children and teens move into adulthood with an equally vague and abstract notion of how to handle money and financial matters. This, as is evidenced by our mounting national debt along with our severe personal debt, is an enduringly troubling issue.
But finances are boring. Xbox 360 is so much more fun! Still, if your children don’t possess a suitable and applicable financial education those Xbox 360s they so amorously covet will be something they can only hope for.
In light of the 2008 collapse of financial and credit markets, early childhood educators are starting to get more serious about teaching valuable lessons about money – namely how to save, spend, and share money in a responsible and sensible way. Sesame Street, that paragon of progressive children’s television programming, has dipped into the subject of recent with a slew of financially themed videos hosted by that eternal toddler, Elmo (see video below):
I think Elmo, that unrepentant Keynesian, sums up the sober and sensible approach to toddler economics with his declaration, “Sometimes it’s important to think about what you really need first, and then you can go for what you want. You pri-or-i-tize.” Maybe expect to see Elmo in committee on Capitol Hill on the first Monday in October.
But to rely upon Sesame Street, and maybe a few earmarked Jr. economics books checked out from the library, won’t likely be enough to help your child get a grasp of how to handle money. Instead of shielding your child from financial matters, and sparing them the woe of having to think about money, you can gently introduce your child to a certain money consciousness. A practical mode of cultivating this consciousness is having them count money (and believe me, they love to do it) and learning the value of each denomination (pennies, quarters, dollars, gold bars, what have you). Another way to motivate such counting (if your children lack that accounting gene) is to institute a weekly allowance, which helps the child learn about money as well as the value of services rendered (I personally like to tie allowance to tasks, chores, and responsibilities). Having an allowance gives children the opportunity to, not only handle money, but save money as well, and if they so choose, to spend it on items and experiences they deem worthy of their hard earned cash. This is where it may get tricky, but also offers up an opportunity for parents to teach children that most essential lesson in how to delay gratification.
How do you manage your dealings with money around your children? Do you feel you are imparting wisdom or keeping them from the ugly truth of financial entanglements? Are there methods and lessons you have found to be essential in dealing with children and money? If so, please share.