How do I teach my 4 year old about money?
By Calm Money Kids · · 7 min read
A lot of parents start to wonder about money lessons around the time their child first asks to buy something at the store. You can teach a 4 year old about money with three simple things, which are real coins they can touch, four jars that each have a job, and a short money talk once a week. You do not need a big lesson plan, because kids this age learn by doing the same small thing again and again.
What can a 4 year old understand about money?
Most 4 year olds can understand that money is something we trade for the things we want and need. They can also learn that once money is spent it is gone, and that some things take a little waiting.
They are usually not ready for big numbers or for waiting months to get something. A week can feel like a very long time at this age, and money is still a real thing they hold in their hand and not a number on a screen. That is why everything works best when it is small, close and easy to see.
Knowing this matters because it tells you where to start. In Calm Money Kids, a 4 year old is called an Early Explorer, and the app gives you activities made for this stage, so you are never teaching something your child is not ready for yet.
When your child turns 5, you can read how to teach a 5 year old about money.
Why should you start teaching your child about money at age 4 and not later?
A child who never gets to hold money or make a choice with it still learns about money, but they learn by watching and guessing. They may start to think that money comes out of a phone or a card and that it never runs out.
That idea gets harder to change as a child grows, and the mistakes get more costly too. When you start at 4, the first lessons cost a few coins, and your child gets years of practice before the choices get big.
At 4, the habit is the lesson. Your child will not fully understand saving yet, and that is okay, because filling the same four jars every week builds the routine that every later money lesson rests on.
How do you set up an allowance and four money jars for a 4 year old?
In Calm Money Kids, an Early Explorer gets a small allowance every week, and it is not tied to chores, because money and helping are two different lessons. The allowance is $1 for each year of age, so a 4 year old gets $4 a week, and $1 goes into each of four jars.
The jars matter because they give every dollar a job before it gets spent. Your child can see that money is for more than buying things today, and they practice that idea every single week. The app keeps track of each jar for you, so you can use real jars at home, the app, or both.
The Grow jar is money for when your child is grown up
The Grow jar holds money that your child does not spend as a kid, and it stays there until they are 18. This jar teaches that some money is for later and that we leave it alone.
You can explain it like a seed by saying, "Your Grow money is like a seed we planted together, and seeds take a long, long time to grow into a tree."
The Dream jar is money for something your child is saving for
The Dream jar is for one special thing your child picks, like a small toy or a book. At this age the goal should be small enough to reach in two to four weeks, because a longer wait is too hard for a 4 year old.
This jar teaches that waiting can get you something better, and a picture of the goal near the jar helps your child remember what they are waiting for.
The Spend jar is money your child can use now
The Spend jar is your child's own money to use this week on something small.
When it is gone, it is gone until next week, and that is the lesson this jar teaches. It works best when your child carries the money to the store, picks one thing and hands the money over on their own.
The Give jar is money to help someone else
The Give jar is filled every week, and once a month your child gets to choose who it helps.
This jar teaches that giving helps other people and that even a small amount counts. It helps to pick giving your child can see, like buying food for a food drive or dropping coins in a donation box.
Your 4 year old does not need to know the numbers yet, so you can keep your words very simple.
You might say, "This one is for big you, this one is for something you really want, this one is for today, and this one is to help somebody."
Why should you let your 4 year old make their own money choices?
Small choices are how a child learns that money runs out and that picking one thing means leaving another behind. It is much easier to learn that with $1 at age 4 than with a paycheck later on.
Say you are at the store and your child wants a toy car and a pack of stickers. You can show them what is in their Spend jar and say, "You have enough for one of these, so which one would you like?"
Then let them choose, even if you would have picked the other one. If they feel sad later about the one they left behind, that feeling is the lesson, and it only cost a little bit of money.
In Calm Money Kids, you can check what is in your child's Spend jar before you walk into the store, so you both know what they have to work with.
Why does a weekly money talk matter for a 4 year old?
A short money talk every week is what turns the jars into a habit. Kids this age learn by doing the same thing again and again and by watching you, so a few calm minutes each week teach more than one long talk ever could.
In Calm Money Kids this talk is called Family Money Day, and it happens on whatever day your family picks. This is when the allowance goes into the jars, so your child can hold the money, count it and drop it in.
Keep it to about five minutes, and ask one question, like "What are you saving for in your Dream jar?" Remember to keep it light and stop while your child is still having fun, because you want them to look forward to the next one.
What are three money activities to try with your 4 year old this week?
You do not need to do everything in this post at once. You can pick one of these three ideas and try it in the next few days, and then add another one when the first starts to feel easy.
Each one takes only a few minutes, and you already have what you need at home.
- Let your child hand the money to the cashier, so they can see that money is traded for things.
- Sort a pile of coins together by size and color, and say the name of each coin as you go.
- Help your child pick a dream goal that takes two or three weeks to reach, and put a picture of it where they can see it every day.
Common questions about teaching a 4 year old about money
Is 4 too young for an allowance?
No, 4 is a fine age to start, as long as the amount is small and your child can see and touch the money.
How much allowance should a 4 year old get?
In Calm Money Kids, the allowance is $1 for each year of age, paid every week, so a 4 year old gets $4. That puts $1 in each of the four jars.
Should a 4 year old do chores to earn their allowance?
In Calm Money Kids, helping at home is kept apart from money. Kids earn Helping Hands points for helping, and their allowance stays the same each week.
Start your 4 year old's money lessons this week
Teaching a 4 year old about money comes down to real coins, four jars and a few minutes together each week. You do not have to get it perfect, because the weekly habit will do most of the teaching for you.
Calm Money Kids keeps track of all four jars for you and gives you activities that fit your child's age.