Financial Literacy for Ages 3-4: Play Promotes Financial Learning
Your toddler is transitioning from infancy to early childhood. Their rapidly developing memory, vocabulary, and social skills make now an ideal time to start teaching them basic money concepts. Research shows that kids get the concept of money by the time they're three and have solidified core money beliefs by the age of seven. So, there's no time like now to start the conversations.
Key Money Basics for Ages 3-4
- Counting and basic math skills
- Being comfortable with numbers
- Identifying coins and bills
- Learning about needs versus wants
- Being able to grasp the concept of spend, save and give
Cash is better than cashless at this age. Young children can't conceptualize money. Cashless transactions make it hard for your kids to understand money and how it works. That's why using actual coins and bills remains the best way to reach financial literacy in early childhood.
MAKE A WISH LIST WITH YOUR CHILD
An essential part of financial literacy is creating a set of priorities. We can’t have everything we want all at once, but we can achieve our goals over time if we plan ahead. This is a great lesson that children can learn. Sit down with your child and have them list five things they want. Then have them rank them from most important to least important. Once the list is created, strategize with your child about how they can obtain their wishes.
TEACH WHILE YOU SHOP
Take your child shopping and actively explain your decision-making process. When you arrive at the store, tell your child how much money you have to spend and what your priorities are. Show them why you are picking one item over another and explain things like discounts and coupons. Remember, children will learn from your example. Telling them about budgeting is important, but it’s much more impactful if they see you following a budget yourself.
Additionally, give your child small amounts of money to spend themselves. You’ll be surprised at how happy they will be to spend $2 on anything they want! They’ll also learn the importance of spending with a limited budget.
Find fun games that involve counting or play money. Learning about money under the guise of play can be a fun way to learn something they might be overwhelmed or confused about.
COUNT AND SORT COINS
Get young children used to handling small amounts of money and being comfortable counting it.
VISIT THE BANK
The most important objective at this age is for your kids to experience the bank environment and learn that it's a safe place that holds your money.
GO THRIFT OR DOLLAR STORE SHOPPING
While not free, you can find some inexpensive bargains at local thrift shops and dollar stores. Bargain shopping teaches your kids how to buy more with less.
EXPLORE CHORES AND EARNING MONEY
Age appropriate chores help your kids grow, take responsibility, and learn about earning money. Be sure to teach them with guidance and encouragement, and incentivize with earning a small financial reward for doing all of their chores and then spending it on something they enjoy.
Age appropriate chores for ages 3-4
- Clean up toys
- Put dirty laundry in hamper
- Pull on clothing
- Wipe cabinets and baseboards (with a wet cloth or sock on hand)
- Feed treats to pets
- Throw away own trash
- Clean up spills and messes
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