Financial Literacy: Five ways to talk money with children ages 3 to 5
An early start is a big advantage when college savings is your goal. That’s why Future Scholar makes it simple for smart parents to open an account online and begin saving for higher education as soon as possible.
We’re passionate about providing you with all the easy-to-use tools you’ll need to manage your savings and plan for the future. And when you save with South Carolina’s 529 college savings plan, you’ll also get great tax benefits traditional savings accounts don’t provide.
At Future Scholar, we’re also passionate about financial literacy. Just as it is in college savings, starting early is beneficial in developing your child’s important financial awareness. You play a key role in helping your young child learn to speak, read and write. You can also lay a foundation for smart financial decisions in the years to come by introducing money concepts into everyday activities.
Since April is Financial Literacy Month, it’s the perfect time to begin! These five activities from Money as You Grow will make it easy to help your child, aged 3 to 5, learn money basics:
1. Talk about earning
Help your child make the work-money connection.
- Describe your job.
- Talk about different jobs others in your neighborhood fill: police officer, teacher, bus driver, babysitter, grocery store clerk.
- Walk through the neighborhood and point out businesses like restaurants and shops. Talk about the people who run their own businesses.
- Encourage your child’s imagination—what business could they run to earn money? If they want to act it out, play along!
2. Encourage saving
If your child receives a cash gift, build the habit of setting some of that money aside. Use a designated jar or piggy bank as a place to save coins—and teach your child how to count up the savings to see what the money can buy.
3. Introduce planning
What goes hand-in-hand with teaching savings? Planning! When your child wants a special toy, use the toy as a savings goal. It’s a fun purchase your child can plan for.
Talk to your child about the financial planning that goes into family purchases. For example, if your family is deciding on getting a new pet, talk with young children about the pet-related expenses the family will need to plan for.
4. Differentiate wants and needs
Making a grocery list or a trip to the store can become a teaching opportunity that will help children understand the difference in wants and needs and introduce the idea of setting priorities.
For example, when shopping for groceries, discuss which is more important to buy: fruit or candy? Try giving your children a small amount of money. Let them choose what to buy with it and discuss how they made their choice.
5. Read about it
You already know children benefit from family reading time, so why not include age-appropriate books that explore stories connected to earning, saving and choices? We’ve got a great list of books by age group to start with. You’ll find even more ideas on the Money As You Grow bookshelf.
Never too early
So much of what we learn comes through the lessons our parents share with us in the course of day-to-day living. You are your children’s first and best teacher, and you can instill the fundamental skills for managing money that will pay off for years to come.
As your children grow, you can also share how Future Scholar is helping your family save for higher education and their bright future. Your children will see first-hand how your smart decision to begin early and maximize the benefits of saving with Future Scholar worked to help them better reach their own future goals.