Teaching Kids the Value of Money
By Natalia Diaz
Sep 30, 2013
Teaching kids the value of money can help kids make better money choices now and later in life. It's also an education initiative the federal government is getting behind with a program called "Talk with our kids about money day."
So why is it important to teach kids about money? According to Kevin Sylvester, co-author of the children's book Follow Your Money: Who gets it? Who spends it? Where does it go?, kids need to be more aware of what they buy and how they spend their money. In their money book, Sylvester and co-author Michael Hlinka use concrete examples like the cost of making popcorn (five cents) versus the cost of buying it (five dollars) at a movie theatre to illustrate concepts like profits and sales. By knowing this type of information, kids can make informed buying decisions about what is worth buying and what isn't, Sylvester explains. It can also help kids choose to skip buying popcorn and save up for something they may really want. According to Sylvester, part of the disconnect with kids and their lack of understanding the value of money is that they aren't exposed to physical money the way past generations were. "Money has moved away from the physical to the abstract. [Before] kids were forced to deal with the reality of how much something cost (they had to count coins, for example) when we needed actual money to buy things," he says. "But with credit cards, debit cards and automatic e-transactions, that tangible relationship with money is almost gone. So [kids] need to know the underlying ideas about 'value,' 'cost' and so on to understand what they are spending.
"To really hone in on the value of money and who is affected by the things kids buy (or steal), Sylvester and Hlinka discuss things like music and movie piracy and the ramifications of stealing products. They also break down money transactions, starting with the price of something, and how much each person gets (e.g., manufacturer, truck driver, government tax department, etc). Then, they show kids how much profit is left from one transaction. It's a fairly concrete way of explaining the impact of buying power and financial choices kids make with tangible examples. By reading the book, Sylvester hopes kids realize they are part of a whole economic spider web and the buying choices they make impact their bank account, as well as the people who make those products. His advice is simple: spend wisely and save, as well as understand the effects of your buying power. This is the first step to becoming a more educated consumer.
For more money tips for kids, visit Talk with our Kids About Money.
Natalia Diaz is passionate about education and raising readers. She has been working in media education for the last 10 years as senior editor at Scholastic Education, as editor of Funschool.com, and as writer and producer at TVOntario and the Independent Learning Centre (ILC). She lives with her family in Markham, Ontario.