While it may seem unimportant to teach toddlers the value of money, bear in mind that in this modern time, children are becoming more aware of money matters. Thus, it is very crucial to start educating them at an early age. Here are some tried and tested tips on how to teach children about money.

Talk To Your Toddler

As soon as your toddler can count, introduce him to money – what it is, how it works and why it is important. Your toddler has to know that there is a cost involved in what you are buying for him. Otherwise, he may just think that you never ran out of money or that if he breaks his toy, you can just buy him a new one. Just keep the conversation brief and causal, say, over dinner, while you are grocery shopping or withdrawing money from the ATM. The earlier you teach your child the value of money, the better he will understand its significance.

Take Your Toddler Shopping

Reinforce this lesson through exposure. Take your little one with you whenever you shop. When you are in a grocery or department store, talk about how much money something costs. Teach him to look at prices and to weigh things. For instance, you can say “If I buy this dress, I will not be able to buy food. Food is more important than the dress, so I will have to skip the dress.” This teaches your toddler that not everything he likes, he can get in a whim even if he can afford it.

Give Him Allowance

Provide an age-appropriate allowance for your toddler. You can give it to him on a weekly basis. A 4-year old can get $2 each week. Encourage him to set aside a portion of his allowance for savings. In case he wants to buy a robot that costs $10 yet he only has $2, do not buy it for him. Tell him to save his allowance so he can go back and purchase the robot. This teaches your toddler the value of saving and hard work.

Open A Savings Account

As your little one gets older, consider opening a bank account for him. Most banks have a special kids’ program complete with educational materials and online activities or special incentives when a specific monetary goal is reached to encourage children to save money. This activity helps your toddler comprehend how banks work and the value of regular, planned savings.

Encourage Him To Make Money

Let your toddler take on small jobs like sweeping the floor, picking up the leaves in your backyard or folding the laundry. Create a chart and stick it on the wall so he can see his progress. For instance, if he completes seven days of his “small task”, give him a dollar. Or why not encourage him to start his own business, like putting up a lemonade stand during summer or selling his outgrown toys at a garage sale. You can do it together or ask his older sibling to help him out. The older one is in charge of the money while he will be the assistant. Earning money gives children a sense of pride.

Volunteer

Another way to teach toddlers the value of money is by teaching them to give. Do it as a family. Shop for food together and deliver it to your local center. Help him sort out his clothes and donate the items to homeless shelters. Doing this makes your toddler realize that money is not limitless, some people are in dire need of it and the more fortunate ones can help those with less.

Most importantly, be a role model. There is no better way to teach your toddler the value of money by practicing the values you want to instil in him.