How to Teach Your Preschooler to Manage Their Money

I know what you are thinking. My preschooler doesn’t have any money!

While you may not be dolling out an allowance quite yet, your preschooler is likely receiving money for their birthday or other holidays. Although your child may not understand the difference between a quarter and a dollar, it’s never too early to begin to teach children the art and virtue of money management.

When I decided it was time to teach my almost 4 year old daughter how to “manage” her money, I discussed the idea with my husband and we determined we would instruct her to “diversify” her income in three parts.

Share :: Save :: Spend

1/3 to share with others    /    1/3 to save for the future     /    1/3 to spend on herself

I was taught by my own parents (when I was a bit older) the traditional 80/10/10 plan in which you keep 80% to “live on”, save 10% for the future and give 10% away. We felt that at her young age, it was more important to learn generosity and putting others, as well as the future before her immediate wants.

To provide my daughter with a visual tool for splitting her money this way, I created a Share :: Save :: Spend bank. Below are the simple instructions for creating your own Share :: Save :: Spend bank as well as a printable to get you started {including 5 Scriptures for Talking Money with Your Preschooler.}

Create Your Own Share :: Save :: Spend Bank

1. Find 3 cylinder-shaped containers such as oatmeal or breadcrumb canisters. Clean the inside well and remove the outside label.

2. Choose gender-appropriate craft paper in 3 different fun, colorful patterns. One for each bank. Cut the paper to wrap around each can. Affix smoothly and carefully with craft glue.

3. Using a sharp knife, cut a wide slit in the top of each lid, big enough for a folded bill.

4. Create a label for each bank. You can use the printable included in this post.

5. Attach the banks together using glue or double stick tape. To further secure them, wrap twine or ribbon around the set.

6. Attach a label to each bank.

7. Teach your child how to manage their money!

Now, when your little one asks for something trivial, you can tell them to check the “spend” bank to see if they have enough money to purchase it themselves. If you’ve started a college savings fund for your child, you can make a deposit of the cash in the “save” bank once a year. When Christmas comes around, we’ll be using the money in my daughter’s “share” bank to purchase a gift for a local child in need. How you teach the details of managing money may vary but the goal is to help your child understand that:

1. Our money is not our own. It is a blessing from God that we must steward.

2. It is important to put the needs of others above ourselves.

3. Ultimately, God supplies all of our needs, but it is wise to save for the future.

Download your FREE printable to get started! 5 Scriptures/Bank Label Printable

Moms, what ways you have found effective to begin talking about money with your preschooler?