Young children pick up the habits of the adults around them. The same is true when it comes to how role models make everyday decisions about spending, saving, and sharing money. Even if parents and caregivers don’t involve children in daily money management, chances are children have already picked up many beliefs and behaviors.
Children under the ages of 5 or 6 may just be learning the names of coins, but they do understand that adults spend money to get the things they need. These spending decisions often involve prioritizing when having to choose between many items or patience when saving up to buy something special. These observations and conversations are all an important part of how children learn how to manage their own money when older.
“Researchers call this early role modeling ‘family financial socialization,’ says Peggy Olive, financial capability specialist with the University of Wisconsin-Extension and UW-Madison’s Center for Financial Security. “Children may not understand complex financial terms, but they are watching and learning that money involves decision-making and problem-solving.”
UW-Extension educators recently surveyed parents in their communities about family conversations around money at home. About one-third of parents reported that they ‘never’ or ‘almost never’ talk with their children about money at home. A little more than one-third of parents reported they ‘sometimes’ hold money conversations, with the remaining one-quarter of parents saying they often have these types of conversations.
The UW-Extension ‘Dollars During Development’ (3D) program provides resources for adults to engage young children in practicing positive behaviors and learning about money basics. The 3D program uses popular children’s books to help families learn key money concepts through reading, play, quiet one-on-one talks, and during every day spending decisions. Parents can find free guides at many area libraries, through the Fond du Lac County UW-Extension office, or online at: https://www.consumerfinance.gov/consumer-tools/money-as-you-grow/.
Long before children may have any money of their own to spend, they are practicing the habits and skills to be wise money managers later in life. Games that require patience and taking turns teach children the value of sharing and waiting for something they want. Trying a new activity, failing, and trying again helps children learn about persistence and following through on goals. All these are valuable skills that contribute to positive behaviors for many years to come.
The Fond du Lac County UW-Extension office is now offering the 3-D program with FDL County Boys and Girls Club 2nd graders with the summer program. Interested in Dollars During Development (3D)? Contact Shelley Tidemann, FDL County UW Extension Educator for more information. 920-929-3174 or email@example.com