How To Instruct the Money Matters for Kids

When your baby is a preschooler, it may seem like a good idea to shield him from the realities of money matters. But you can teach kids some of the basic concepts, such as items should not be removed from a store unless you pay for them first, and that parents get money by going to a job and working. Knowing what is expected will improve behavior in stores, and prepare preschoolers for further learning.

Check Out Before Opening

Trips to a grocery or department store are often a toddler’s first experience with money matters. An important lesson is that everything has to be paid for before opening or eating. It can be a difficult concept that he has to wait to enjoy the prized toy or treat only after giving it up to the sales clerk for scanning. Allow your toddler to pick a small treat or toy that goes into the cart, and allow him to eat it or play with it after it goes through the check-out line. Not only does this teach delayed gratification, it also shows him the proper way to purchase items in a store.

Money Doesn’t Appear Magically

Kids often think that if parents have a check or credit card, they can buy anything. In fact, you may have met some adults who still think that way. You can help your children understand about working to get money by briefly visiting your workplace with them, taking them with you to the bank and by giving them a small allowance for doing age-appropriate chores. Use a piggy bank to save small coins or reward tokens that your child can turn in at the end of a day or week for something he wants.


Help your child set realistic goals for making purchases out of his allowance. Maybe he likes gum or candy that is not on your normal grocery list. Or maybe you pay him for picking up toys in tokens that he can exchange for reading a story or playing an electronic game. Draw pictures on allowance play money that show what that token can buy from a family “store.” By spending the tokens or change he has earned, your child begins to understand working for rewards.

Extending Credit

Extending credit to junior entrepreneurs complicates parental bookkeeping. Preschoolers have a short memory for items purchased with “future work.” They have a long memory for ways to manipulate parents into letting them have things they have not yet earned. Whether he uses tears or winning smiles and kisses, you negate the lesson you are trying to teach when you give in. Have other items on hand that can be used as “just because” rewards.