Cheng Cheng Tan
 
 
 
Short Lesson On Handling Money For Young Kids
Parents are more aware nowadays that financial literacy is
important for kids. If children grow up without the
knowledge of handling money, they will end up paying for
debts or credit card bills when they are old.
 
We teach children about money as they grow up. For young
kids, it is probably harder for them to understand. I made
use of the idea of using what kids like to let them learn
about money first. This is suitable for kids from about
three and a half years old.
 
This lesson is about "You cannot spend more than what you
have."
 
I gave my two kids sixty cents each. Each of them spent
twenty cents playing games. They are now left with forty
cents. They decided that they want to buy sweets and
chocolates instead of spending the remaining forty cents on
games.
 
We proceeded to the candy store. They politely asked the
shopkeeper how much the various chocolates, sweet and
crackers cost. Most of them cost more than forty cents (
about sixty cents to a dollar) except for a lollipop which
cost exactly forty cents. I gently reminded them that they
had only forty cents and that I have no more money. They
finally decided to get the lollipop even though it was not
their first choice.
 
The lesson is that even though they like the chocolate more
than the lollipop, they cannot buy it because they are only
left with forty cents. I would not encourage them to borrow
money for daily pleasures in life (unless it is for a
calculated risk business). I thought it was a pretty good
lesson because the children still got a lollipop in the
end. It was a win-win for them and for me. If they cannot
find anything for forty cents or less, then they cannot buy
sweets. They could, however, use the money for games
instead. It is their choice.
 
This seemingly simple theory is usually forgotten when we
grow up. There are simply too much temptation for us that
we find it very difficult to resist. There are perpetual
sale the whole year round and most of us try to comfort
ourselves by buying things we do not really need just
because it is cheaper than the usual price.
 
There are new gadgets and new models of everything. (e.g.
handphone, television, computer etc) We are nearly always
tempted to buy new and better things. However, are they
really necessary? There is no issue if you have excess
money of course. Most of the time we do not really need
these things but it would be 'good' to have them.
 
Be aware and do not fall into the trap of advertisers.
Advertisers have to do their best to market their products
and make sure you feel you must have it. Think about it
seriously before buying it. The old model may work just as
well but not as trendy. Spend where it is necessary and
where you can get the best returns. Remember to weigh the
advantages and disadvantages.
 
 
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Cheng Cheng is a parenting expert with two boys age 5 and
6. She has learnt a lot from books and other mothers. She
hopes to share her experiences and knowledge which will
definitely be useful to you. For more tips on parenting and