1. Start a piggy bank
We started a piggy bank with our daughter when she turned three. I opted for a large, translucent milk jug with a slit in the lid. That way, she could see how the money piled up. Any time we had some spare change or found a coin on the sidewalk, we let her put it in her bank. This year she graduated to a ceramic bunny because she grasps the concept, but a clear jar or bottle is great for newbies. This will help them get excited, even though they don't fully understand money yet.
2. Talk about costs out loud
If you mention out loud the tiny things you do automatically, your kids will learn to think frugally. Say,"These are the same eggs, but it's cheaper to buy 18 than 12. We'll get 18." Talk through your mental calculations out loud. You're already doing them, so just say it so they can hear it. Now your child understands your thought process in making financial decisions. An added bonus: This may be the most practical math tutoring your child can get from you.
3. Let them set a savings goal
Talk to your children about individual savings goals. Then set and execute those goals. An example would be saving for a new bike, toy or even ballet or sports team fees. By setting a savings goal, putting the money in a bank they can see, and then using the money for that goal, your child will learn three important lessons about money. Firstly, we need to have patience and pay for things with cash. Secondly, using money means using your own time. Lastly,when you buy something, your total money is diminished.
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