Brought to you by: Breez DeGuzman

Parents often make the mistake of thinking that preschoolers are too young to understand financial matters. It’s true that kids that young won’t understand compound interest or mutual funds, but there are some things they can learn about money that will benefit them later in life. Here are some things that we as parents can teach our kids at a young age.

One of the first things that kids learn about money is that you can use it to buy things. We rarely have to teach them this, because they learn it from being with us when we go shopping. But they are usually unaware of most of the aspects of money we take for granted.

* Preschoolers can learn about the different denominations of money. They may not remember that there are 100 cents in a dollar, but they can usually recall which coins are worth the most and least. Learning a little about this before they start school will give them a head start in math.

* You can teach the basics of bank accounts. When kids see us writing a check or swiping a card and taking something home, they may think we got it for free. Teaching them that you have to have money in the bank in order to write a check or use your debit card will help them understand that the things we need in life come at a price.

* Preschoolers are not too young to learn about earning money. You can assign chores and pay them a certain amount for each one completed to illustrate the concept of working for money.

* Saving money is an important lesson for kids to learn young. You can help instill the importance of this by encouraging them to save a portion of their allowance. After they have saved for a few weeks, help them count up how much they have and decide what to do with it. Or better yet, have them set a goal for savings and see how long it takes to reach it.

* Shopping provides a wealth of opportunities to teach kids about money. You can discuss how to save money by using coupons and buying things while they’re on sale. You can set a budget and see how much you can buy with it. And you can let them help you count the money when it’s time to check out.

Small children catch on to the importance of money quickly. We can help them develop a healthy attitude toward it by teaching them basic concepts and modeling good spending and saving habits. This will build the foundation for a lifetime of good money practices.