Should a Toddler Learn About Fiscal Responsibility?

This post was written by Julie Douglas. Photo credit: The Agency Collection/Getty Images

Lately, when something in our household breaks or we run out of an item, the first thing our daughter says is, "We should get another one from Target." She believes the big box retailer to be the font from which all things spring, including, perhaps, even human life. When asked where she gets such cute toes, her pat response is, yep, Target.

No offense, Target, but I'm beginning to worry. We visit you often for all the obvious conveniences you provide, but I now realize that you're inadvertently coloring my kid's perception of world, and my silence on the matter is contributing to the sense that we live in a disposable world full of stuff, stuff, stuff -- as easy to have as picking an apple off of a tree (if such a pastoral pastime exists anymore).

When is it the right time to start teaching your child about money and responsibility? I'm guessing when she begins to understand that nearly everything that she never knew she wanted was one mouse click away or a short drive from the house.

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To that end, my husband and I will begin the great experiment in trying to teach our toddler the money basics. And we're going to try to keep it simple, so we're not inundating her with abstract concepts. But mainly -- and here's the rub -- we're going to try to set good examples about money, aka, Talk the Talk and Walk and the Walk. Easier said than done when it comes to money. Amirite?

Here are a couple areas of focus:

Explaining the Concept of Money: We've been telling our daughter that "We go to work and get money. We use that money to buy things, like Goldfish Crackers" (her current obsession, and therefore relatable). She understands that we have cards that we use to buy things, and she even reminded me last week to bring my wallet as we were walking out the door to go to the grocery store. (I forget my wallet a lot.)

Giving our child money. Our daughter has a piggy bank and routinely dumps the change out. We've been talking to her about saving her coins to buy something. When she gets a wee bit older we'll count out some change with her and pretend to buy something. When she seems to get that we'll take the change to our market around the corner and buy her first piece of candy. (Candy-as-financial incentive: This could be a really, really bad idea; or it could lead to our daughter becoming the next US Treasury Security.)

Monkey See, Monkey Do. According to the Forbes Magazine article, Teaching Kids About Money: "You should show restraint with money. Your child should see you budget, comparison-shop and make regular contributions to a savings account." Translate to toddlerism: We've been talking to our young entrepreneur about how something is too much money to buy. She hears my husband and me talk about our all-cash budget system, and sees us dole out our respective weekly allowances. When she gets to be a bit older and is begging for something with the passion of an Oscar-worthy performance, we'll have a chance to sit down with her and research the cost, see if second-hand is available and perhaps even talk about what sort of environmental impact the item has.

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Investing with our child. We're not at this point yet, but I really like the idea of teaching kids about investing early. My father has done this with my cousins, and every year since they were little (4ish) he's sat down with them and helped them picked stocks based on their interests. (Too bad Elmo doesn't have his very own stock. He'd be one rich, swinging monster.)

Normally I don't sweat when I'm going to teach our daughter something about the world. It'll come in time, I figure. But our generation has just lived through an unprecedented era of wealth, one that's come to a sobering close. And our kids, and ourselves, are now grappling with an entirely different financial beast these days. Understanding and respecting money is more important now than it's ever been.

Do you have any teaching-toddlers-about-money tricks that we can add to our arsenal?

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