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Money management for children

May 11, 2001

Money management for children



Five-year-old Amanda was excited. She had received a $10 bill as a birthday gift. She begged her parents to take her to the mall so she could buy a toy. Sound familiar?

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Parents often wonder how they can help children learn sound money-management skills at an early age. Telling them "money doesn't grow on trees" usually doesn't sink in when they seem to want everything. Children are good at mastering the concept of "want" long before they seem to understand "cost" and "need."

Children's books are a good way to teach money-management concepts to youth. Even preschoolers can learn from books such as "The Berenstein Bears Trouble With Money." A child in first, second or third grade may enjoy learning from "Arthur's Funny Money." Children who can count and use a calculator could learn money skills from "Alexander, Who Used To Be Rich Last Sunday."

When selecting a book, consider the age for whom it was written. Preschoolers have difficulty understanding concepts such as time and value. They may think a nickel is more valuable than a dime because it is larger. Using credit cards and checks may confuse them.

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They have an understanding about buying things, but little understanding of limited money resources.

Elementary school-aged children are eager to learn, but their attention span is short. Making choices is difficult. Money means more to them, but they may be careless with it. They are, however, beginning to develop an awareness of the relationship between today's decisions and tomorrow's results.

Read the book to or with the child. Consider that each child has a preferred learning style. Hearing the book as it is read, seeing the pictures that reinforce the message, and touching items that relate to the story will help the child learn. To get a sense of your child's learning style, use the assessment online at www.parentcenter.com/quiz.

Use the concepts presented in books to start a family discussion about your family's resources, expectations and goals. This lets the child understand your earning, spending, saving and sharing goals. Use hands-on examples, such as letting your children watch you write checks to pay the bills each month. Allow the child to help put the check in the envelopes for mailing.

Most parents agree that financial responsibility is a vital part of every child's education. Financial literacy is a key component of everything from developing self-esteem to maintaining successful interpersonal relationships. Parents can help their children grow up to be responsible, clear-thinking individuals, who can make wise decisions about the use of money. The use of children's stories about money matters can facilitate that goal.

If you would like a list of children's books about money, send a self-addressed, stamped business-size envelope to Maryland Cooperative Extension, Washington County, 7303 Sharpsburg Pike, Boonsboro, Md. 21713. Mark the envelope, "Money."




Lynn F. Little is a family and consumer sciences extension educator for Maryland Cooperative Extension, Washington County. Maryland Cooperative Extension programs are open to all citizens without regard to race, color, sex, disability, age, religion or national origin.

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