My 2-year-old son has a collection of small change. Though he calls the coins and odd dollar "mine monies," he didn't understand, really, that these little bits and pieces could be traded to get something else. He just hoarded whatever odd jingly handful his grandparents gave him. "Saving his pennies," we said smiling.
But when I found him dumping the change in his bed and throwing it, the need for financial lessons became clear.
Only 10 percent of American 12th-graders--teens about to enter the real world--could answer personal finance questions satisfactorily, according to the Jump$tart Coalition for Personal Finance Literacy. The group found only four of every 10 high school students understood they could lose their health insurance if their parents lost their jobs, and most couldn't balance a checkbook. I'll admit, I don't regularly balance a checkbook now that all my accounts are online . But I learned about budgeting as a kid watching my mom growl over the family checkbook, and then handled my own account in high school. Those skills have prevented me from bouncing checks and racking up credit card debt. I don't want my son to still be throwing money around when he's 22.
So, I decided 2 was old enough to understand the basics of budgeting: choices. Well, that and realizing that money is worth something. When he watches us pay for everything with a little plastic card, it's a hard concept to grasp. A hands-on lesson was in order.
Our first shopping excursion was easy because we were in a sporting goods store and he had only $5, an Easter gift from his grandparents. There are only so many things $5 will buy at a sporting goods store and --luckily for my baseball-obsessed kid--a baseball is one of them. He picked out the ball, took it to the register, handed over his $5 and got $1.82 in change. He sleeps with his ball.
He actually had to make some budget choices during our second shopping trip. We were at a big-box store and he had $2.25 - the leftover $1 from the baseball expedition and some other random change. We insist he save at least half of all non-gift money he collects, advice provided by personal finance author Jeff Opdyke. First, he picked out a ball set from the $1 section, turning down coloring books, stickers and a foam sword. Halfway through the store, he changed his mind.
"I think I want a car, Momma."
"Well, you'll have to put the ball back. You don't have money for both."
He thought. He looked hard at the ball in his hand.
"I want cars. I put this here."
He picked out two Matchbox cars, taking several minutes to determine which two of the rows and rows on display he wanted. The cashier looked at me funny when I insisted she ring those out separately from my order. I ignored her raised eyebrows and helped him dig out the quarter from his pocket. He stood on tiptoes to hand her the crumpled dollar bills and change. He grinned wildly and swung his bag as we walked to the car.
Since the shopping trips, he saw my wallet and grabbed it.
"I need money."
And so begins our next money lesson: earning it.
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Related links:
Starting and Sticking to a Budget: Step 1
Teaching a Toddler to Listen
The Dollars and Sense of Being a One-Income Family
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