The Money Game
As a parent and someone who is interested in creating wealth, helping my little lady become financially savvy when she grows up is very important. I come from a wealthy family that “gave their children fish, rather than actually teaching them to fish”. So I thought it was timely now to teach my 4 year old girl Pyper about money and finances. We have started getting her used to money – she picks up bits of money that is either lying around in coins or someone might give her $5 here and there for a birthday. I firmly believe that parents who introduce the concept of “saving money” to their children early will be helping them in the long run. I recently came across an article that talked about practical steps parents could do to teach financial literacy to their children.
The system they came up with was to have 4 envelopes labelled as follows: Save/Spend/Donate/Invest. I loved the concept and so we made 4 boxes out of a used ice cream container with a bit of sellotape and some cardboard (instead of using envelopes) and created out own “Money Game”. Then I said to my daughter “honey would you like to play a game” and then described the rule of the game to her: “As you get older, you will get money and you can put this into your money box”. I could see that the thought of responsibility even at 4(!) was appealing.
I explained to her that all 4 sections of the container should have the same amount of money in it. So if she receives a $2 coin we need to put $0.50 into all quarters (make sure you’ve got a lot of change at home – great for teaching kids some basic math and the recognising coins). The trick about the Money Game is explaining why there are 4 sections and what they mean. Here’s what I said to my daughter:
Save – This is money that you can use on a rainy day.
Spend – This is for something that you really want either right now or when you have enough money saved up.
Donate – There are people who are less fortunate and need a bit of extra help, and you can decide who you’d like to help.
Invest – This is money you can use to make more money.
Now you’re thinking explaining these concepts to a 4-year-old is crazy and too difficult for them to understand. But it’s amazing how switched on even young children are about reward schemes (e.g. star charts) and the Money Game just extends on the concept of a star chart. So if you explain the categories of the Money Game to them often enough they will eventually develop a good understanding of it and get into the habit of good money management.
At the end of the day if you can teach your child to fish you will feed them for a lifetime or so the proverb goes.
By Scott Lancaster