Disclaimer: As your children become more proficient handling money, we encourage you to let them demonstrate what they know. Consider this a next step as your children grow in their familiarity with money.
Money skills are often relegated to the "home economics" periphery of education. Most schools just don't have the time to teach anything past the value of coins and dollars. But we believe money is an essential part life and ought to be practiced just like math and reading.
It's time to have a conversation about creating ways for young kids to handle money, not make the best choices, understand the consequences and then try again.
Failure is instructional. Without the failure part, how will kids learn with something as tangible as money? The process is what truly matters – not necessarily the results.
Here are two things you can do today to allow your kids space to grow their money skills.
1. ALLOW YOUR KIDS TO MAKE MONEY DECISIONS ON SMALL THINGS.
Empower them to spend their money on things. I know what you're thinking -- there's no way I'm letting my 6-year old blow money on candy or cheap toys. We agree. This isn't enabling random choices of a wandering child. It's about structuring an environment where kids can practice what they learn.
Develop a parent-approved list of items you are comfortable with them purchasing like books, certain toys, healthy snacks, etc. Communicate what's acceptable and consistently let them use money under a certain amount without you stepping in and saying no.
For example, a 5-year-old gets $5 to start with. As they demonstrate sound decision making the amount can increase. As they make choices on what to spend on, provide feedback and talk about why they felt it was worth buying.
2. CHANGE THEIR PERSPECTIVE ON MAKING MISTAKES.
Mistakes enhance learning, but only when mistakes are unhinged from disappointment, fear and failure. Instead of focusing on the outcome or result, our energy should be spent helping kids develop coping and resilience skills that help them reflect on their actions and solve problems. This process is what leads to important character traits like determination, motivation and grit.
Creating a space for kids to learn through success and failure is essential in all areas of a child's development. Money is no different. Couple that with a perspective that mistakes are not the enemy and you've created the loving environment that will foster small change in your child's money maturity.