Teaching Kids About Money: Babies Through Preschool Age

You can't really teach babies about money, but you can do a few things to set them up for their financial development.  Here are a few suggestions:

• Set up a savings account for them as soon as you get their social security card.  You will need their social security number to set up the account, so don't try before then. 
• Buy bonds for birthdays or other special occasions.  There are several different types of bonds that mature at different rates.  You can find all you ever wanted to know about bond at this website.  My dad gave each of us a bond when we were born that matured about the time we went to college.  I know this doesn't seem very exciting for the little kid, but think how excite you would have been to receive this at your high school graduation. 

Once your little ones reach preschool age, you can start to discuss money and what it is used for.  Here are some tips for the preschool kids. 

• Let them deposit money they have earned into their savings account.  Many banks have little incentive programs that will help reward their savings. 
• Once your kiddos are old enough to hand scissors, let them help you cut coupons.  Even if you don't completely trust them, give them a coupon that you know you won't use to cut and let them sit at the table with you.  They feel important.  When they get a little older, you can even have them help to sort them.  This is a good time to talk about how things cost money and what the coupons are for.
• PNC bank has a program called, For Me, For You, for Later:  First Steps to Spending, Sharing and Saving.  You can sign up for a free kit at pncgrowupgreat.com. 
• Have your kiddos do little extra jobs to save for things.  Right now we have an envelope on the fridge for a "little boy who needs a toy".  This came out of a fit that my four year old threw after we did not buy something at the store.  We got home and discussed why he acted like he did.  I realized that he had no real concept of what money was.  He said, "You swipe the card and we take the stuff home, Mama."  See, even us Frugal Fort Wayne sisters don't know what we are doing!  My son is going to have to take a toy for a little boy to Sunday School at Christmas time.  We decided that he could learn a little about money by saving up so he can pick out something and buy it himself.  He gets quarters to put in his envelope if he does extra work. 
• Kids at this age just love being around their parents, so anything you can do to include them in your quest for frugality is one step closer to educating the next generation.  Good Luck!

These are just a few ideas.  How do you teach your preschoolers about money or frugality?  We would love to hear about your ideas, too!