Learning about money through real life experiences
In an increasingly cashless society, teaching children where money comes from has never been more important.
The increased use of credit cards, internet banking, tap-and-go payments, and online shopping, means children often don’t see money being exchanged for purchases. The notion of handling notes and coins is becoming less visible, making it much more challenging to teach children the value of money.
To counter this, the educators at Goodstart Gawler South in South Australia, are introducing money management skills to children in their preschool years, launching a financial literacy program with Beyond Bank.
Centre director Janine Ludwig, said the program aimed to teach children the basics of money through real life activities and experiences.
“We introduced the financial literacy program in the preschool room earlier this year. Families opened up a Beyond Bank kids savings account, and each child was given a money box to save their pocket money,” Ms Ludwig said.
The preschool children head to the bank to deposit their coins every two months. There, the children have taken a tour of the bank, learnt how the ATM works, and explored the safe to see where their money is kept.
“The visits are a great experience for the children as they get to learn the deposit process with a teller, as well as where money comes from,” Ms Ludwig said.
“Developing financial literacy skills from an early age is crucial to setting up children for the future. While the children are too young to understand the value of money, seeing their coins build up in their piggy bank and visiting the local bank are simple ways to involve children in day-to-day financial activities.”
Ms Ludwig said the educators have extended the learning within the centre by creating their own bank.
“To support financial education within the centre, the children are encouraged to recreate the banking experience through fun, imaginative play. Children take turns being the banker, as well as giving and receiving money,” she said.
“We’ve also just purchased a toy ATM, with pretend notes and coins. It works just like a real one and the children love taking turns depositing and withdrawing money.
“I feel it is important for children to understand that money makes the world go around. Helping children understand the difference between needs and wants and the importance of saving will mean they’ll be able to make good financial decisions in adulthood.”
The centre has received really positive feedback from families about the program, and are now expanding it to all the rooms in the centre, so that all families who wish to participate can do so.
Tips to helping children understand the value of money
The foundation of financial education is learnt within the family. But it can be challenging in our increasingly cashless world. The good news is there’s plenty parents can do to teach children the value of money.
Here are a few suggestions from ASIC’s Money Smart Website
- Explain the ATMs and how they work – use a trip to the ATM as an opportunity to explain where money comes from. Children love pushing the buttons and helping withdraw money. You can explain that the ATM holds the money you have saved, and that you can check how much money is in your account.
- Visit the bank – Taking your child to the bank and watching bank transactions helps them understand what cash is. Let your child be involved as much as possible. You can also let your child hand money to the teller.
- Shopping lists and trips to the supermarket – Ask your child to help you compile a shopping list of items needed for your home. When buying items, you can explain how items are priced and that you can get cheaper or more expensive versions of the same product.