How we’re teaching a three year old about money
July 9, 2018
FIREcracker says don’t give your kids money and let them fail if you want them to succeed.
That’s similar to my core parenting tenets.
I will save JB’s life when ze is choking or about to pelt over the edge of a cliff.
I don’t spare zir the bumps, bruises, scrapes and scratches that happen when you run pell mell through life without your feet under you. Ze takes after me so won’t ever be graceful but eventually ze will learn to stop falling so much. BY FALLING SO MUCH.
I just stopped being the biggest klutz in town at age 35 so I could send zir to gymnastics lessons for fun and an attempt to learn some physical balance, but my guess? Ze will just be pretty good at the sport and STILL go through life collecting bruises like Mario Coins. Fine. Bruises won’t kill you.
Back to the point – there’s more nuance to this whole parenting thing. We are saving a bundle for zir college education even while I’m hesitant to commit to paying for all of it because I think ze needs skin in the game. At the same time, I know what life was like when I had to work all through college – I barely remember anything I learned.
The reality is, if we’re doing our jobs right, ze will very likely have some resources inherited from us or from one of many grandparents. We must teach zir to fend for zirself, making a living wage, saving, investing, and making good decisions. In short, have the skills to survive without money coming from anyone else. But I also want zir to have the skills and discipline when resources are plentiful and not live in short-termism.
Some people are naturally frugal, some people learn it. If JB is the latter, the lessons should come from us – we have the knowledge. It would be a massive failure on our part not to try to pass along the lessons and philosophies that create the life that ze lives now.
Money lessons in this household started as soon as JB could sit up but ze peculiarly only wanted to eat our HOA’s annual reports. Maybe not so peculiar. By page 43, I wanted to eat it too.
Now that ze is 3 and old enough to understand, we’re building on the very basic concepts we laid down earlier with real life examples and practice. My focus this year isn’t to teach JB how to earn and save money. The mechanics of earning and spending money is really easy to learn – that can take a back seat.
It’s far more important to me for zir to build a solid financial foundation based on the abstract concepts of learning our core values, prioritizing how we spend money, and choosing when to spend consciously.
We want JB to know:
- money is a tool that we use to further our overall life goals,
- those goals shouldn’t be limited to “when will I have the money to buy that thing?”
- we don’t have to buy things just because money is available.
We model our beliefs, we don’t just talk about them
We take JB shopping with us all the time. Normally, I’d say keep the kids away from temptation. But how will they deal with temptation when they inevitably encounter it on their own?
So instead of avoiding the issue, we bring the kid to the temptation and teach zir how to think about it.
Lesson 1: Most of our shopping is grocery shopping because we love food, we prioritize healthy food, and we love food. When your life feels like an endless rotation of grocery stores, it’s easy to think that food is easy to get – just go fill a cart and swipe a card! We fill in some of those blanks while shopping by talking about choices. Foods that aren’t in season and fresh are more expensive, we choose in season produce that’s better and cheaper. Processed foods are ok in moderation, maybe one or two items appear in our cart amidst a sea of fresh produce and other healthy menu building blocks. We buy on sale, in bulk, and store our food wisely.
We follow that up with zir by sharing simple tasks in the kitchen like preparing vegetables and removing skin and fat from chicken; how to safely use a knife, food processor, sifter and hand mixer; talking about planning meals; eating most meals together.
Even more important than the “knaife” skills ze so desperately wants, or the wisdom about filling an affordable shopping cart, we want zir to have a healthy relationship with food itself.
Lesson 2: We occasionally venture into that Michael’s where I want every single thing I see (almost).
JB gets a $2 budget at Michael’s. Ze may spend up to $2 or save it for next time. This lets zir learn how to choose things based on a limited budget but also teaches the concept that you do not HAVE to spend that money just because you have it. Ze picked up on that incredibly fast – on our second trip, ze decided to just look at everything and not take anything home.
Lesson 3: An IKEA mission was hampered by two meltdowns. Nothing could be done to ward off the 1st but we navigated the 2nd thusly.
JB REALLY wanted a packet of purple napkins.
Why?
“To take home.”
But for what use?
“Nothing. Just to take home.”
Now I’m not sure I would have caved anyway even if ze had any use for them but it was a teachable moment. Ze was on the ground melting and I hauled a limp and still resisting body over to a bed.
Me: “Let’s talk about them. Why do you want them?”
JB: I just want them! To take home!
Me: But you don’t want to use them? They’re pretty. They’re $2. You get $2 to spend in stores.
JB: No! They’re $5!
Me: (No, they’re not, but preschooler is prelogic so roll w/it) Oh no! $5 is more than you have! We’d have to save $2 and $2 and $1!
JB: tears forgotten, no, $4!
Me: $4? Well then we’d only have to save $2 and $2! But let me ask you this: do you remember that Peppa Pig book you wanted?
JB, diverted but suspicious: Do they bring it back?
Me: the book fair people? They might bring it back on Monday. Even if they don’t, you could save $2 until you have $10 and you could buy that instead. But if you spend this $2 now, for napkins you won’t use, then you have to wait even longer for Peppa Pig. What do you think?
JB: I want Peppa Pig.
Tears gone, I gave zir a piggyback ride as we discussed the overall merits of strawberries vs blueberries.
Lesson learned: we don’t buy things just because we can and we want them if we don’t Love Them. We wait and buy things we REALLY REALLY love and will use. Then ze got distracted by pictures of strawberries and I don’t think the lesson took but we’ll talk about it again and again and again.
Lesson 4: I was giving zir stickers when we were potty training: one sticker for each successful trip to the toilet. One sticker refunded for each accident or false alarm. Two stickers refunded if ze gets me out of bed for a false alarm.
With this advanced form of bribery, we decided that a representation of money would be better. I gave zir the first two dollars today, one earned today, and one earned last week. Zir eyes were SHINING.
Then when I started explaining ze could use these to trade for, redeem them for, a big reward like a book or a huge cookie (requested earlier), ze immediately shut that down. Nope, not giving up my money! 😂 A money hoarder already?? That may be genetic after all.
Other values we are sharing
We value family time, learning, and contributing to the household. Because we value them, we spend money to make all of that possible.
You’re doing so well with the kid. Our son is older and he needs to learn more about money. We’ve been focusing on being frugal and delay gratification while he’s small. I need to figure out the next step. Oh, we taught him that money doesn’t come out of the ATM for free. We need to work for it.
I’ve had a lot of long money talks with friends who have already raised their kids so I’m hoping that their collective wisdom will see us through. I feel like I’m kind of throwing spaghetti at the wall!
You’re a great mom!
I was thinking about kids last week, because I was with my niece and nephew who are 3 and 5. Anyway, it’s neat to see how their personalities are sooo different and think about how those traits might play out in terms of money. #1 is super curious and always asks why and is very persistent. #2 is smart as well, but is less interested in the world, and gives up much more easily. However, #2 already has a real sense of fairness and cares about others. I guess what I’m trying to say is, I’ve always felt I would teach my kids certain things, but I can see how some things won’t take, depending on their personalities. My sister does a great job of teaching independence and consequences, but I can totally see #1 defying everything when he’s older! However, if JB is absorbing the learnings, then that is super great!
One of my earliest money memories was being at a car dealership watching my parents pay for a car in cash. I’d say the most important money lesson I learned from my parents is that you can live simply and still be really happy. I didn’t have nearly the things kids have today, but I didn’t know the difference.
I don’t think I’ve ever had a particularly spendy personality, but I wish I had been taught about how to make money work for me when I was younger. No one’s fault, but I’d be much further in my money journey if I had known about it.
It’s tough – you get used to one kid and then the next one is COMPLETELY DIFFERENT. So then you have to learn all over again what works for THIS kid. Or I guess you could not, and just force them into a mold, but I’m pretty sure that doesn’t work.
I’m trying a lot of different approaches with JB because of exactly that observation: ze IS a defiant child and may defy just about everything as ze gets older. My hope is I’ll help zir absorb the lessons in the way that most benefit zir without hurting anyone else. Just gotta keep trying!
The lesson your parents taught you is invaluable, and I really hope that we can impart that to JB too.
I think the earliest lesson I remember is probably rolling pennies that my parents had saved up. It was a big deal that we were bulking up my bank account, so I learned that small amounts add up and that saving for college/in general was always important.
Either that or trading in the recycling for cans that we’d saved/picked up on walks. I got to keep the money from those efforts, but it was as close to an allowance as I got for a while.
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I remember rolling pennies! I still like doing it, though it’s been a few years since I had enough to roll.
TAking note!
I honestly don’t know what my early money memories are – maybe the one time I honestly didn’t know if we lived in a big or small house and wrote at kindy that we lived in a small one erringon the side of modesty. I just know that somehow I grew up knowing you always Dave first and you don’t buy full price 😬
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Those are two good concepts to build on! 🙂
My earliest money memory was my parents had this huge jar full of coins and day after day both my mom and dad would come home after work and add more coins to the jar. I learned at that time if you save even a quarter a day, it add up to a lot.
That jar would be our saving grace whenever we needed to use coins to use for the bus/train.
You are teaching your three year old so well with the concept of money. My two year old only knows money by going to the store and seeing something he wants and says’ Buy it, buy it!’ He’s still very young in understand on how money works but within the next year or two we will start showing him the ropes.
I love that! I wonder if we can do something kind of like that…
Great post. Dave and I are thinking of ways to teach our four year old about money and at this point in time, it’s mainly delayed gratification. She knows that we need to go to work to earn money and in a way understands that “money doesn’t fall from the sky”. We are trying to figure out the next step.
It’s so tricky to get all the important concepts across in these early years. I just hope we’re doing it right for JB.
My earliest money memory was when we were in a grocery store and my dad paid with a single $20 bill and got all this Change back. You gave them one piece of money and they gave you back a bunch more? Then my dad explained to me about denominations. So not all concepts about money are intuitive…and it must be more nebulous with credit cards.
Great job teaching money lessons in public during a meltdown. I would not have been able to stay rational.
I love that memory – I think at this age, denominations are absolutely not intuitive! So one money is good but “two monies” is better to them.
My family didn’t talk about money, except to model “work hard, pay your bills and if there’s anything left over, put it in the bank.”
Not invest it — just put it in the bank. Sigh.
May I suggest a book that would be helpful? Beth Kobliner wrote “Make Your Kid A Money Genius (Even If You’re Not).” If your library doesn’t have it, request that it be purchased or obtained through inter-library loan. I think Ms. Kobliner would highly approve of what you’re doing right now.
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You were well ahead of me! There was never room in the philosophy or practice of my family to even have anything left over to think of. Sad.
Thanks for the recommendation!
Earliest? I don’t recall. The main money lesson, though: my parents, especially my father, were strongly averse to buying ANYTHING on time. They paid for everything in cash: clothing, household goods, cars, travel, and when they finally bought a house, they bought it outright in cash. They rented until such time as they had enough money to pay for the small house where they retired.
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“we don’t have to buy things just because money is available.” —-> this was such a bad habit for me for so long, and I still have to fight it sometimes! Way to go!