Age: From 4 years old
Objective(s):
1. To teach your child about responsibility and the importance of managing his/her money.
2. To teach your child how to organise his money.
3. To develop their math skills
4. To lay the foundation for lifelong financial literacy.
Materials:
1. 1 wallet with a compartment for notes and a zipped compartment for coins.
2. A token of money - this can be in the form of an allowance or earnings your child earns from doing chores
Directions:
1. Show your child where to keep the notes and where to keep the coins in the wallet.
2. On a Date-One-on-One (DOO) with your child, bring him to a store of his choice.
3. Let him pick the shopping basket and select an item of his choice.
4. Guide him to the checkout queue.
5. Guide him to give the cashier the cash and to receive the change back.
6. Guide him to place the money back to his wallet.
Additional Information:
This was J's first wallet. I got it from the flea market when he was still a toddler. This wallet was first used as a tool for him to learn how to zip and unzipped. Now at 5 years old, this was used to teach him how to use wallet to organise money.
Some experts suggest that a child can have his own wallet at the age of 4, but we started at the age of 5 from the natural progression from the children's bonus system that we have implemented a couple of months ago on 27 February 2014.
J has been earning smileys for the chores he does. Instead of exchanging it for watching Disney Show on TV on Fridays, he chosed to save it up. And he has saved up for the past one month to more than 50 tokens in his piggybank. He chosed to exchange them for cash to be able to spend it (must be the pragmatic Chinese blood in him.)
Today, he (5Y1M8D) took out the tokens and counted them until reaching 50. He exchanged it for 50 DKK (9 USD or 11 SGD). This morning, he was very excited. He wanted to go and buy something with the "money" he has earned.
Although he has made wise choices and went for the cheaper things. He asked me where is the cheapest place he could spend his money. He chose Søstrene Grene himself, without me prompting him. He seemed to know that Søstrene Grene sells things that he could afford. I was just glad that he did not ask me to bring him to BR Toys, as his 50 DKK would not buy him much things.
He decided to spend all his money, but ended up spending 40 DKK, with 10 DKK left in his wallet.
This was the first time he experienced buying things on his own and has the freedom to decide what he wished to buy for the tokens he earned. In this way, the self-motivation to earn rewards comes from himself, although it is controversial whether kids should be motivated by rewards. After spending almost all his money, he said that he can work more next week so that he can earn more money, reinforcing the self-motivation to work and earn money.
My main aim is to teach him a little experience and feel of Maths to figure out how much things cost and compare it with how much he has. On reflection, I hope I am not teaching J how to spend money, instead of how to save money. I hope I am not giving him too much freedom at a young age to decide what he wishes to buy.
Another reason is because I am tired of opening my wallet each time J asks for something. It feels like money just drop from the sky, and I want him to learn that money does not come free. Although I don't always buy him things each time he asks, I am looking for a way where he can earn his own money and spend them as he likes, instead of asking mom to buy things for him.
On hindsight, I should have said that he is allowed to buy one thing, and that he should think through and only buy a really cool thing that he truly likes, instead of buying junk.
It has to be a balanced approach. So well, that was that, our first experience with using a wallet and going shopping :-)
References:
http://kids.lovetoknow.com/wiki/Kid_Wallet
http://www.parents.com/kids/responsibility/money-management/money-milestones-for-kids/
http://childrens-health.lovetoknow.com/child-development/allowance-money-management
http://walletengineers.com/2013/12/05/how-to-teach-your-kids-financial-responsibility-at-an-early-age/
http://familyshare.com/5-easy-ways-for-kids-to-make-money
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