Here’s How I’m Teaching My 3-Year-Old About Money

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Teaching money management doesn’t have to wait. I’m already helping my son to understand that money only goes so far. Read on to learn how. 

Learning about money can be a lifelong process. And I want to start my kids off early with developing smart money habits that will make it easier for them to save later and avoid going into credit card debt.

Because this is important to me, I’m already starting to teach my 3-year-old about how to make smart decisions with cash. Here’s my technique for doing that.

This is how I’m helping my son learn to make smart money choices

One of the first lessons I want my son to learn is that money is not unlimited and you have to make choices about how best to spend it to bring you the most joy.

I’m using a very simple technique for doing that.

When we go to the Dollar Tree or we go to garage sales, I’ll take a few dollars out of my bank account and hand my son several $1 bills to keep in his little wallet. Depending on the situation, I might hand him $3 or $5 or $10. This is money that he is free to spend as he wants, but once it is gone, then he is not able to buy anything more.

I explain to my son each time that this is all the money that’s available for him to spend on toys and games, but that he can do anything he likes with it. The first time we did this, he bought the first two toys that he saw at a garage sale — and then was upset that he had nothing left to spend when he found an even cooler truck at a later place.

The next week, when we went to the Dollar Tree, he remembered that lesson. Instead of putting things into the cart right away, he walked around the entire store to look for which toys would be the most enjoyable to play with, and he made a smarter decision about which ones he wanted to buy.

Now, of course, since he is just 3 years old, he doesn’t do this perfectly every time and sometimes he wants the first thing he sees. But he’s already starting to realize that when you spend what you have, there is no more if something better comes along — and this is a lesson that I hope he will carry through for the rest of his life so he can prioritize what he wants to do as far as spending and saving.

It’s never too early to teach kids about money

Financial education isn’t a part of the curriculum in most schools and it’s something many people are lacking — which makes it really hard to develop good money habits as an adult.

I plan on teaching age-appropriate financial lessons through simple examples throughout my kids’ lives. And other parents may want to do the same. There’s no reason to wait to start helping your children to develop smart money habits so they learn to make financial decisions for themselves.

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