Starting Financial Peace Junior at Age 3

Our 5-year old, as noted previously, has some interesting habits and ideas when it comes to money. We got her off to an early start as we were determined to teach her about personal finance, as well as not to end up as that family with the brat begging for money to buy toys while in the middle of the store.

So at age 3, we gave her FPU Jr. for her birthday.

I'm not sure which was worse: Having our daughter open it, and toss it aside like a three-pack of socks OR our family thinking we were loony for giving a three-year old a money management product and enduring all of the eye rolls. Who has the lamest parents? "I do, I do!!"

Here is why we proved them both wrong:

At age 3, we had her earning money by doing chores. No, she wasn't weeding the garden or dusting the house. Nor was she pulling down big bucks. The key is 'age appropriate' - for the work and the reward. At 3, I think she was feeding the dogs twice per day, for a quarter each. It was something that she liked to do anyways.

Still, she didn't totally value this whole 'money' thing. They were shiny, and fun to put in the piggy bank, but that was about it. Sometimes, she was quite ok to not do the chore, and not get paid. That was fine - she was 3.

But already starting to understand that work = money.

FPU Jr. comes with a little marker board and pen for listing chores and checking off when they were completed. For the most part, she would play with this and draw all over it. We gave up on the marker board as we really didn't need it for her age. We talked to her about money too. When we had her attention, we'd talk about how we give, save, and spend. Mommy and Daddy do this and so should she.

Saving wasn't tough. She'd put the money in and forget about it. We'll talk about giving in another post, as we have a great story about that. Spending is where some early lessons happened.

We explained to her that a certain amount of her money could be used to buy things that she wanted. It didn't do any good to talk about half, or one third - c'mon, she was 3! We would remind her that if she saw a toy that she wanted, she would have to use her own money. This kept the whining down considerably, as Mommy was never viewed as an ATM, and Daddy never seen as a money tree.

Usually, she didn't have her money with her when we went places, so it was easy to keep her from acquiring lots of plastic crap. I've always said that plastic must be magnetic as kids seem to attract it like metal to a magnet. But one day, not having her money didn't matter.

While in the check out line at the grocery store, she saw a toy 'brass band' set. It had four or five play instruments in it, and it was $10 or $15. Enough that we weren't just going to buy it for her. But she was totally enamored with it, and that didn't happen with her. We told her that if she wanted it, then she had to use her own money, and she didn't have that with her. "Can we go home and get it?" It was a short drive, and we knew that the grandparents had been 'feeding the pig' as well, so she likely had enough. Actually, she had around $40!

We gave her one last out at home. "This is all of your money, it will take this much of it to buy that toy". She was ready and we were willing. She was as proud as a 3 year old could be to put that toy on the conveyor belt, hand the cashier the money and pay for it all on her own. She has loved that set to pieces (literally in some cases), and still plays with it 2 years later.

Today, she takes her purse with her to garage sales and occasionally buys something. Its good for her to have that experience and realize that once she has bought something (usually at the first sale, and usually for most of her money) that she can't spend it again - it's gone.

Got any 'teachable moments' to share? How have your kids succeeded or failed with money?


debtfree2009 said...

I think for my older son the biggest lesson was watching Dave Ramsey talk about how much money you could have if you never bought a new car and invest the money you would have some great some in twenty years or whatever. That stuck with him and although he is in college he would not consider buying a new car or having a car payment.

Also, he works during the summer and takes the entire school year off of work. He budgets $20 per week to spend.

Wish I was as smart as he is at that age.

autumnesf said...

Our 19 year old went through the FPU at 17...and is a big FAIL in finances now. You have to put it in practice...not just learn it.

So now we are working on working with Dave's suggestions with our 13 and 4 year olds. Hope it works out better this time since they will have more of a chance to live it.

Mr. ToughMoneyLove said...

I wish I had FPU Jr. to use with my kids when they were that young. (In their 20's now.) I had to use my own curriculum!

Anyway, great job with your PF education of the young one.

Mr. (not) the Jet Set said...

autumnesf -
It's tough to undo 17 years. We taught an FPU for the Next Generation class a few years ago (mostly high school students). It's a tough age to teach. I know that they all retained information from the class, but really, less than half were likely to actually do it.

The earlier, the better! Best of luck with the younger ones. And don't give up on the 19 year old - may have to learn some things the hard way.

debtfree2009 -
It's fun how some of those things really strike a chord with certain kids. I know that we had some kids from the FPU for the Next Generation class asking their parents for help with starting an IRA!

Mr. Tough -
Thanks for the kind words. We are working to make sure our kids do better than we did.

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