Q: Our daughter Maya is almost four, but we haven’t started talking to her about the money she puts in her piggy bank. We’d like her—and later on, our son Samuel—to understand how savings work. Do you have any tips?
—Cathy Wilson & Patrick Gatien, Vancouver
A: My five-year-old Abby just spent her own money on a Gelarti sticker kit this past weekend, for the very first time. She brought her purse full of change and we added it up carefully for the cashier. For kids this age, there are two lessons to focus on when it comes to money. The first is simply counting—this much change buys this awesome craft project. Abby and I go grocery shopping regularly and we always look at the prices and compare them. The second lesson is that while saving money takes time, being patient helps you get something you really want. Kids are so used to instant gratification in almost every area of life that it is important to connect the act of saving over time to the benefit of getting something they want. Getting a handle on your money is a critical life skill—like reading or swimming—and these skills all need to be actively taught and passively modeled. Good for you for getting an early start.
Bruce Sellery is a frequent guest on financial television shows and author of Moolala. Do you have your own personal finance question? Write to us at [email protected]