Play can teach children a lot about money, and this is more important in the early years than we often give it credit for.
For a child who’s not long out of nappies, they may be some way off knowing what money actually is, but they can certainly begin to grasp some of the habits that will go towards good money management in future.
Delayed gratification is a concept that even toddlers can understand. That is, the idea of forgoing an immediate, small reward in order to receive a larger reward later on. It's a bargaining tool that many parents use in a range of contexts, but it is a particularly useful one to impart in a monetary setting. For example, the idea of not buying one small toy now, but instead continuing to save collected pocket money to buy a more desirable toy in a few week's or month's time.
Children can recognise value and the idea of an exchange transaction from a fairly young age. Therefore, encouraging them to handle cash and pay for things at a shop (pretent or otherwise) themselves can help to teach them that there is value attached to things they want.
Keep a log
Running a pretend shop is a good way to develop monetary skills, and making a log of the money a child is ‘paid’ gives their collection additional significance and weight, therefore advancing their appreciation of the concept. The average child can expect to collect around £444 a year in pocket money*, so writing this down and encouraging them to acknowledge it, handle it (in small assisted transactions) and actively participate in its saving (via a cash register or money pot) is certainly a good starting point to the development of sound monetary skills in future.
Photo credit: Hape checkout register
* Research by Xero