Money-minded moms and dads take heart: An H&R Block study revealed that 75% of teens rely on you as their primary source of financial information.
That’s promising news—especially given that money management isn’t part of the standard curriculum in most schools.
But the reality is that many parents are squandering the opportunity: Research by TD Ameritrade indicates that parents may not be broaching financial topics with kids until they’re about 14.
That’s at least seven years after Joseph Cilona, Ph.D., a clinical psychologist based in Manhattan, says kids’ money attitudes—about saving, wants vs. needs, and feelings of empowerment vs. fear—are entrenched.
Think about that.
You wouldn’t dream of waiting until your kids are near the driving age to teach them right from wrong or how to get along with others—so why postpone lessons that can affect the amount of stress, satisfaction, and opportunity they’ll have for the rest of their lives?
To help you jump-start these important cash conversations, we tapped money and psychology pros to share their top 12 strategies for teaching kids about money—starting with your preschooler.
3 Tips for Talking Money With Preschoolers
1. Get Creative With Nursery Rhymes
With their funny phrases and catchy melodies, nursery rhymes have been beloved by young children for centuries—making them the perfect vehicle to pass along some solid money advice that kids will remember.
So the next time you need a break from Jack and Jill or Humpty Dumpty, Cilona suggests making up your own rhyme. “Create a simple catchphrase, like ‘See some money? Save some money!’ that you can repeat over and over,” he says. “Then tie it to an action, like putting the quarter you found in a piggy bank.”
Your preschooler may not understand the implications of the phrase right away, but—just like “Little Miss Muffet Sat on a tuffet”—it may very well stick with her throughout her entire life.
2. Take the Alphabet Approach
If you’re trying to help your toddler learn word and letter recognition, you’ve probably asked him to list all the words he knows that start with the letter “A.” According to Cilona, positive financial choices can be communicated—and ideally, absorbed—in much the same way.
“If a child receives money for his birthday, ask, ‘What do we do when we see some money in our birthday card?’ When he gives the correct response—save it!—provide the same praise and smiles you would when teaching them the ABCs,” Cilona says.
Then, as your preschooler gets older and receives birthday twenties instead of singles, saving should hopefully already be second nature.
3. Play With Real Money
Money lessons don’t always have to be serious. In fact, Cilona says you can teach young kids the value of money simply by swapping out plastic play money for the real stuff—even if it’s just pennies and nickels stocking their toy register.
“Young children cannot think in the abstract—and can’t understand the idea of fake versus real,” Cilona explains. “So when their game is over, create a ritual that empowers kids to deposit the real money into a safe and secure place.”
While seemingly insignificant, Cilona says this action is key in instilling a sense of respect for money.