As children grow, it is common for them to witness adults buying things and exchanging coins and notes. It is important for them to understand the value of these individual amounts as well as the importance of saving, spending and sharing. In order to do this, we should allow children to practice handling money.
Making financial decisions are important skills in life and can be taught as soon as children can count. In the Year 4 class at Astor International School, the students were given the opportunity to create their own pretend store where children can shop with play money that is provided to them in Singapore currency. Using a cash register, students take turns buying and collecting money. They learn how the register allows them to calculate the change for their customer.
At Astor, children in all classes receive ‘Dojo Dollars’ as part of our behaviour management strategy. These notes come in different denominations and children are allowed to trade their smaller notes for bigger ones daily. Students also visit the ‘Dojo Market’ where they can shop for items in exchange for Dojo Dollars that they have earned. In this process, students may save up for an item that costs more than they currently have, which allows them to learn the value of earning and saving. Students also begin to understand managing their money in order to buy the items they desire.
In the Year 4 class, students learnt to understand different currencies. With Astor being an international school with students from all over the world, it is important for students to understand the various names and values of currencies worldwide. It allows them to be internationally minded and could be handy when going on holidays!
Here are some ideas for children to learn about earning, spending or saving at home:
1. Savings Jar
Set up a clear jar at home for children to save their money. A clear jar allows them to observe their growth. Children could make money by helping out with chores at home or save from allowance given to them. Having a special item they look forward to buying will motivate them to save in order to purchase the item.
2. Wants versus Needs
Children may find it hard to differentiate between things they need or things they want. Encouraging children to think about whether it is something they need would allow them to make good choices with their money.
3. Setting money goals
In order to avoid impulsive purchases, encourage children to set goals on what they wish to buy. Setting a goal will allow them to prioritise what they save up for. While keeping a goal in mind, they are less likely to spend their money on impulse and will realise that it will take a longer time to save up for it if it gets spent on another item.
4. Giving and sharing
It is a wonderful quality for children to begin helping others from a young age. Encouraging children to donate a small fraction of their savings to charity will allow them to learn that money is a way of helping people as well and not simply for purchasing things.
Learning how to make good financial decisions is a process that we continuously learn throughout our lives. However, embracing good habits early could allow children to grow into financially responsible and successful adults.
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