Teaching Money Concepts

What Do You Think?

Jennifer and her mom are shopping for a birthday present for a friend. They pay for the gift and Jennifer sees a hair barrette she really likes and says to her mom, "This barrette is so cool, would you buy it for me?" Her mom pays, "We just don't have any extra money right now." Jennifer whines, "But Mom, just write a check for it."
(See end of newsletter for a possible answer.)

Parents may wonder when to start teaching children about money. Children are not born with money sense and need help and guidance to get them started in the right direction.

Teaching money management has never been more important. Many teenagers are handling lots of money without having the slightest idea of how to do it. If children learn the basics as they grow up, they will be better prepared.

Getting Started

While younger children learn by watching how others handle money, third grade children will learn by doing things with money themselves. Your child can learn about how money is earned, used, and saved. The child can make some decisions and figure out money is limited. It's important that you try to teach your child at his or her level. You cannot expect a child to see money in the same way an adult does. Use examples and activities that match the child's age and development.

Your child can deal with small amounts of money and make simple decisions and plans. Provide lots of chances for your child to do this. Remember, he or she will learn by doing.

Here are some fun activities you might try with your child:

Allow your child to help make decisions at the store. Talk together about deciding between two items—for example, buying either generic brand or name brand cereal.
Give your child a regular allowance. This will help teach limits and how to follow a plan for spending.
Think of ways your child can earn some money and keep this separate from any allowance. The child needs to learn where money comes from and that it "doesn't grow on trees."
Open a savings account so the child can learn to save for something special.
Talk about advertisements and their messages. Help the child learn ads aren't always real or what they appear to be.

Learning Together

Here's an activity you can do with your child to help him or her practice making change.

You will need three colored dice, a dollar bill, some change, small toys, and a shoe box.

The red die is pennies, the blue die is nickels, and the white die is dimes.
Roll dice to decide how much the toy costs. (For example, 3 on red die = 3 cents; 4 on blue die = 20 cents, and 2 on white die = 20 cents. The toy costs 43 cents.)
Make change from $1.
Roll dice again and buy another toy.
Be sure to praise your child when he or she makes the right change. Help the child if he or she has trouble.

Adapted from Drew, Bonnie. Money Skills: 101 Activities to Teach Your Children About Money, p. 61, 62. Used with permission.

Having Fun

Have your child unscramble these words. They are found in the "Learning Together" section.

g e n a c h
e d c i
l l d o a r
n t e c s
l i l b
n e p n s i e
sy o t

Answers: change, dice, dollar, cents, bill, pennies, toys

Consider This

Mom says, "Jennifer I know you like the barrette. But remember, just having checks doesn't mean I have money to buy it. I can only write checks up to the amount of dollars in my bank account. The rest of the money in the bank account has to pay for our family bills this month."

Prepared by Donna K. Donald, family life field specialist, and Vicki W. Sickels, former family support program associate, and edited by Laura Sternweis, communication specialist, Iowa State University Extension

...and justice for all The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be made available in alternative formats for ADA clients. To file a complaint of discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.

Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Stanley R. Johnson, director, Cooperative Extension Service, Iowa State University of Science and Technology, Ames, Iowa.

This newsletter is published for families with first grade children by Iowa State University Extension. For more information about parenting education, contact your local county extension office or access the Iowa State University Extension to Families website, www.extension.iastate.edu/families.

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Teaching Money Concepts - A Newsletter for Parents of Third Grade Children

What Do You Think?

Getting Started