I am a firm believer that is it is never too early to teach children about money. In fact, the sooner the better. And though an infant can not grasp the idea of money, children as young as 2 can start to learn and understand concepts that will help them through life.
A simple task such as putting coins in a piggy bank can help a 2 year old. You can use the opportunity to show them the difference between a coin and a bill. Line up different coins and start talking to them about the difference in a penny and a quarter. The texture of the different coin can be talked about and it is even good hand/ eye coordination to let them put the coins in the slot.
But don’t stop there. Show them a dollar bill and make it a point to let them watch you pay for something with it. Explain that money is necessary to buy something. Let them hold the dollar and pay for something that they are getting. And when they ask for something in the store you can remind them that it takes money to buy it. If they have handed over money to pay for something they will get the concept a little easier than if Mom or Dad always just swipes a card and is done.
Between the ages of 2 and 5 you can even start to help your kids understand the difference in what they need and what they want. I try to ask my young children if it is something they will play with or something they have to use to take care of themselves. Though my 3 year old is still asking for everything under the sun, my 6 year old is starting to explain to her that she does not need it so she does not have to buy it. It is important to help your kids establish financial independence.
The other thing that is a good idea at this age is to ‘play’ store with your little ones. Pull out play money, set up a ‘register’ and have them buy stuff. I sit at my desk and they go get a toy to buy from their playroom. They come in with the toy in their play basket and I ‘scan’ it and tell them how many of their bills it will cost. This has been invaluable for my kids as they are starting to understand that money is needed to buy things and that when you are out of money, you can not buy anything else.
Just as it is never too early to teach kids manners, it is never too early to teach kids about money. The more you help them interact with it, the more of an understanding and respect they will have of it later in life.