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Smarterthana5yearold hero
By Mandy Kelso
• Apr 29, 2024
Financial Education Strategy Lead

Welcome to TD's latest series on financial literacy and how to talk to your kids about money. From a young child to college bound, this series should be fun and revealing on how your children see and understand the way of finances.

You know the old saying that parents have eyes in the back of their heads?

Well, they aren't the only ones doing the watching. Many parents will tell you that they're often shocked at how much young children pick up these days.

Through the use of electronic devices, watching their parents and learning at school, kids truly are like little sponges.

It's the same when it comes to how children learn how adults earn, spend, and make decisions about money.

We take for granted that our children have watched us discuss or transact money, but how much have we taught them about the underlying reasons we do what we do when it comes to money?

Do we help them connect the dots to how financial fitness influences our overall health and happiness?

Do they understand it as a tool to help themselves meet their larger goals in life or see it simply as a means for survival?

As parents of very small children are well-aware, most learning begins with a question.

Here are a few for you and your child to start your journey together for a healthier financial journey. You might be surprised at how much your child already knows!

In the Young Child category we interviewed my very own Reilly, who is 5 years old.

Now on to the Quiz!

My Takeaway from the Quiz

These questions helped me understand what my daughter sees in our everyday lives and how she is piecing together the idea of "money."

Like everything we need in life, she believes that we can find money at the grocery store—that's where we get our food and other basic necessities. It is also one of the only places where she actually sees me take out my wallet to pay.

Our children don't see us at our computers or phones using our online banking to pay the rent or utilities and rarely do small children pick up on the quick collection of a credit card by the waiter at the restaurant, especially if there are coloring books in front of them.

My daughter's answer alerted me to the fact that in order to emphasize that other things besides groceries require an exchange of money, I will need to more purposefully draw her attention to those exchanges when the happen.

"Reilly, do you want to help Mommy pay for our meal? Would you like to hand the nice waiter our money card?"

Reilly's answer to the last question about the relative costs of thing—she answered that a bicycle costs $10-- was a great chance for us to talk about the materials that bikes and basketballs are made of and that some objects contain more materials and take more time to put those materials together such as a bike, versus a ball which is made from fewer and less costly materials with less building required.

When I told her a new bike could cost $100 or more while a new basketball might only cost $10, she began to think about the exchange of time and effort as well as materials that goes into something we might buy.

One of my favorite things about being a parent is how magical my children are—how they work to make sense of the world around them and draw the most delightful conclusions ("let's go to the grocery store to get bananas and money!")

Like most parents, I hope their imaginations stay intact even as I work to demystify some of the more utilitarian facets of life, such as the use of money. I hope that the delight of understanding and pride of mastery show on their faces as we grow together, and that one day, rather than serving money, their creative spirits will be served by it.

Learn how to teach kids to budget HERE!

Want to learn more about Money matters?
7 Tips for Saving on Summer Activities for Your Kids
Teach Your Child How to Be Savvy About Finances
Keeping Your Child Safe from Online Dangers

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