Help Young Children Form Positive Financial Habits

parent and daughter putting coins into piggy bankGuest blogger and Iowa State University Extension and Outreach Human Sciences Specialist in Family Finance, Sandra McKinnon shares some compelling information on youth and financial literacy.

Children form financial habits at an early age. Parents and care providers can influence what those habits will be. University of Wisconsin-Madison researcher Karen Holden and colleagues found that habits children learn when they are young form the basis for their future behavior. A study from Cambridge University found that children form financial habits by age 7. We may teach our children that a dime is thin and worth 10 cents, but developing financial habits includes more than just recognizing coins. Parents and care providers can help children gain the knowledge and skills they need to develop positive financial habits.

The Consumer Financial Protection Bureau suggests teaching preschoolers these basic concepts:
You need money to buy things.
You earn money by working.
You may have to wait before you can buy something you want.
There is a difference between things that you want and things that you need.
Other concepts to establish good financial habits include learning about numbers, time and institutions, such as stores, banks or credit unions, and employers. Children also can learn about budgeting, regular saving and shopping strategies; social values, such as gifts, generosity and sense of community; and public goods like the library.

Another way to engage with children is by reading money-related books with children, and providing hands-on learning opportunities. Check out the following titles at your local library:

Sheep in a Shop by Nancy Shaw
The Berenstain Bears Think of Those in Need by Stan and Jan Berenstain
Just a Piggy Bank by Mercer Mayer
Just Saving My Money by Mercer Mayer
A Chair for My Mother by Vera B. Williams

The goal is to help children become comfortable with basic tools of how and why financial choices are made. For example, we can encourage pretend play, like a grocery store. Or we can explore careers by playing dress-up or acting out stories. In addition, we can talk about whether spending money on entertainment, for example, is a need or a want.

ISU Extension and Outreach human sciences specialists in family finance offer Preschoolers and Pennies: Read, Talk, Learn and Play, a 2-hour training for child care providers. Providers practice a way of reading with children that gives children an opportunity to become storytellers of books with a money theme. This introduces and reinforces money-related words and concepts in a more meaningful way. Complementary activities throughout the day encourage preschoolers to practice money skills.

Visit the Extension Store for the Allowance Game. Playing this game starts a great discussion on choices and consequences.

Barb Dunn Swanson

Barb Dunn Swanson

With two earned degrees from Iowa State University, Barb is a Human Sciences Specialist utilizing her experience working alongside communities to develop strong youth and families! With humor and compassion, she enjoys teaching, listening and learning to learn!

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Just Read Everything in Sight

AlphabetDid any of you ever play the “Alphabet Game” when traveling in the car with kids? It went like this. Look for any word that starts with the letter “A.” When you see it, yell out the word before anyone else can. Billboards, road signs, business signs, moving vehicles – all were eagerly searched for that letter. And things turned really interesting towards the end of the alphabet. This game got our family through many road trips. 🙂

We can use opportunities throughout a day to help our children practice reading. Following a recipe, shopping for groceries, checking the weather, following sports scores, picking out a movie to go see. Yes, reading materials are more than books. And books can be more than bound pages with a hard cover. Introduce your child to the fun of audio books. Now we have online or electronic options with literally any book at our fingertips. It’s not about which type of method is the best. It’s about getting your family to read so choose what works for you.

How have you made reading fun in your family

Donna Donald

Donna Donald

Donna Donald is a Human Sciences specialist for Iowa State University Extension and Outreach who has spent her career working with families across the lifespan. She believes families are defined by function as well as form. Donna entered parenthood as a stepmother to three daughters and loves being a grandmother of seven young adults.

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Saturday Morning and a Paper Bag

booksLet me start by sharing a childhood memory. Every Saturday morning my mother would load us four kids in the car and drive into town to the library. Then she gave us each a paper grocery sack and turned us loose. We filled our sacks with a week’s worth of reading and left the library excited about “our new books.” Later in the evenings we would all, parents and children, settle down with a book or magazine.

Now many years later I can tell you we never stopped reading. All four of us kids read daily – books and magazines and newspapers.

So what’s the point of my story? It’s really quite simple. Our parents made it a priority to expose us to the world of reading at an early age. They made sure we had access to reading materials and modeled reading themselves.

Thank you Mom and Dad for giving your kids a gift that keeps giving – hours of enjoyment with books in hand. And yes, I still go to the library on Saturday mornings to stock up on books for the week. The only difference is I carry a reusable library bag instead of the brown paper one.

Donna Donald

Donna Donald

Donna Donald is a Human Sciences specialist for Iowa State University Extension and Outreach who has spent her career working with families across the lifespan. She believes families are defined by function as well as form. Donna entered parenthood as a stepmother to three daughters and loves being a grandmother of seven young adults.

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