Teaching your children about the value of goods

Useful tips

The value or price of goods can be a difficult concept for some children to grasp. Help your children understand by having them compare various household items based on size, purpose, complexity and, ultimately, price. Use the Price Tag Game to help you with the familiarization process. You can enter the value of the goods you have at home so your children can learn every day.

Moreover, you can also talk to your children about the value of goods to make this concept a reality.

Examples of questions you can ask your child:

Useful tips

1. Outline the steps of a purchase

   Some young children are interested in knowing how adults buy and sell goods. Without mentioning all the details of a transaction, you can introduce your children to the buying process when making daily purchases (groceries, gas) or occasional purchases (TV, computer). Your children can also compare the various steps between these types of purchases.

2. Comparing costs

   Encourage your children to ask questions regarding the price of a home compared to the price of a new TV. Let them try to figure out how many hours of work are required for your family to make such purchases. Keep calculations simple as it's only a general overview of the value of goods. Your children will have their entire lives to find out the exact cost of high-ticket items and learn the average salary of an adult.

   Example:

   To help your children understand how work income is spent, draw a pie chart with all your weekly expenses. Split up the pie according to the percentage of money allocated to various expenses: about 40% for home-related expenses or rent, 15% for food, 15% for transportation, 10% for healthcare and 10% for leisure, etc.

   Your children will quickly understand that work income must be used for family expenses before wants and personal interests.

   By discussing family income in simple terms with real examples, your children will have a better understanding of how it's spent.

Useful tips

1. Introduction to budgeting

   Drawing up a budget helps you manage your money and spares you daily headaches. Perhaps your children already know the basics.

   Get them interested by showing them a quick overview of the last family vacation with Model to Plan Monthly Spending.

   Opening an account for your children at a financial institution is also a good way to teach them about budgeting basics.

   To start, your children can manage their money by separating it into 3 categories:

First category	80% for expenses: a fund for various expenses such as outings at the movie theatre, sweets, snacks, etc.
Second category	10% to 15% for savings: a fund for medium-term savings. This percentage can be higher if your children are saving for a specific goal.
Third category	5% to 10% for sharing: a fund for sharing Choose an organization or cause that's important to your children or family and once you reach the goal, make a donation to the organization you chose.

2. A 3-column budget to learn how to manage money

   "I began drawing up fictional budgets with Émilia when she was 6 and a half years old. We started by calculating the amount of each purchase with candy. Later, we used candy with different monetary values. Now, she understands with real money. She's 11 years old now and she has a much better understanding of the expenses in my monthly budget."

   Nathalie, mother of Émilia