When kids are really young, their idea about how to get money is pretty simple, not to mention misguided: Run out of cash? No worries! Just go to the bank! Don’t have enough money to pay for something you want? No sweat! Swing by an ATM!
In short, early on, kids don’t really grasp that, for most people, barring some grand inheritance, work and money are impossibly intertwined. They often see funds as limitless—mommy or daddy always can get more. As a result, it can be pretty challenging to get them to understand that things are not free, and many children end up resistant to the idea of working for what they have, failing to appreciate what you buy for them.
Challenging, however, doesn’t mean impossible. One of the simplest ways to get your child thinking about money in a more work-based or earnings way is to turn to the simple practice of comparison. You might already have done some comparison work by explaining that five pennies is one nickel, two nickels is the same as a dime and so on. This is essentially “apples to apples work,” because you are comparing one piece of money to another.
To move your child into a slightly different “apples to oranges” work-to-reward perspective, start with a unit of time, such as one hour. Then establish what that time would be worth if your child spent it working. As in the real world for older teens and adults, some jobs for kids are harder or require more advanced skills. For example, a half an hour of lightly cleaning his room might be worth $3, but helping you out in the garden or raking leaves for the same time might be worth $5. Make a simple chart with him to show these differences.
Once you have your chart all set up, the next step is to incorporate it into everyday shopping. When you are at the grocery store, for example, you can have your child figure out how many hours of Chore A it would take to buy Food Item B. It’s fine to use a calculator or smartphone app for this, although ideally, you should encourage him to do the math himself. To make things more interesting, when you use coupons or can figure out how much you’ve saved during a sale, have him calculate how many hours of work the savings equates to for Chore A, B, and so on.
After your child is comfortable with this comparison process, you can move on and incorporate it into his regular savings and spending goals. You can have him figure out that it would take 5 hours of Chore C to get enough money for a video game, for example, or only 3 hours of Chore D. This can help him see what work would get him the money fastest—because the jobs that are worth more are harder, he’ll eventually catch on that, by using more advanced skills or putting in more effort, the reward is bigger.