MAHY and MAZACHOWSKY: How to teach saving and spending to kids as young as 3 years old

Caitlin Mahy, Associate Professor of Psychology at Brock University, and Tessa Mazachowsky, PhD student in Psychology at Brock University, had a piece recently published in The Conversation about how young children learn about saving money.

They write:

“Planning for the holidays will look a different this year in the face of COVID-19. Beyond gathering restrictions, many families have come up against economic hardship and other stressors related to the pandemic. 

With the holiday season fast approaching, budgeting and finances might be on the mind of many parents. Now might be a perfect time to involve children in discussions about saving and encourage them to practise making their own saving decisions.

Consider the future

The act of choosing to save or spend money often involves considering a future point in time. For example, a child who wants to spend their allowance on a new toy might think: “If I buy this toy, I can bring it to school tomorrow to show my friend.” But another idea might be: “If I spend all my money today, I won’t be able to buy a treat at the park tomorrow.”

The idea that our choices are influenced by a sense of connection between our present- and future-self is called the future self-continuity hypothesis. By this account, people who feel disconnected to their imagined future self are less motivated to save for their future.”

Continue reading the full article here.

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