[The First 7 Years Are Crucial] Financial Education for Young Children | 5 Steps to Start Money Education Right Now

"Isn't it too early for money education?" Many parents of young children might think so. However, recent research from the University of Cambridge has scientifically proven that the foundation for financial habits is set by age 7. Cultivating the right values regarding money during early childhood leads to your child's future financial independence.

Why is financial education in early childhood important?

The foundation of financial behavior determined by age 7

According to research findings published by a team at the University of Cambridge, it has become clear that basic concepts and behavioral patterns regarding money are formed by age 7. Children who receive appropriate financial education during this period tend to have higher savings habits, planned spending, and investment awareness in the future.

Economic literacy needed in the AI era

In the 2030s, cashless payments and digital currencies will become even more widespread, and the concept of money will change significantly. Deepening understanding of "invisible money" from early childhood will be important for future economic activities.

Things you can do at home right now! 5 financial education steps

Step 1: Experience the "value" of money

Playing shop is a good place to start. Using play money, let them experience value exchange, such as "1 apple = 100 yen" or "1 snack = 50 yen." They can naturally learn that money is a "useful tool that can be exchanged for things."

Practical idea: Put prices on snacks or fruits you have at home and enjoy playing shop for real.

Step 2: Distinguish between "wants" and "needs"

When shopping, build a habit of thinking together: "Is this absolutely necessary, or do you just want it?" Being able to make this distinction leads to preventing future wasteful spending and encourages planned expenditure.

Example of what to say: "We don't have milk in the fridge, so we need it," or "I know you want this toy, but we already have something similar at home."

Step 3: Teach the joy of "saving"

A transparent piggy bank should be prepared to create a habit of putting in small change when they help out or do something good. By visually seeing the money increase, they can experience a sense of accomplishment in saving.

Tips for setting goals: Start with small, achievable goals even for young children, such as "When you save 100 yen, let's buy your favorite sticker."

Step 4: Experience earning money by "working"

Create a system where you pay a "helping wage" for household chores. However, basic chores (carrying dishes, tidying up toys) should be unpaid, and pay a "wage" only for special chores (lining up shoes, folding laundry).

Important point: The goal is to let them naturally understand that money is "earned by working."

Step 5: Acquire the habit of "sharing"

Teach the habit of dividing saved money into three categories: "spending," "saving," and "giving to others." By specifically setting aside a "giving" portion, you foster both compassion and a sense of social contribution.

Practical Method: Prepare three small boxes or envelopes and let them experience dividing their allowance for chores into three equal parts.

NG Behaviors in Financial Education to Avoid During the Preschool Years

Do not treat money as something "dirty."

If you instill the value that "talking about money is vulgar," it will hinder the improvement of future financial literacy. Teach them that money is an important tool necessary for life.

The misconception that "if you have money, you can buy anything."

You must also teach them that there are important things that money cannot buy (family love, time with friends, health).

Do not let them judge value solely by the amount of money.

Instead of a simple value system where expensive things are good and cheap things are bad, cultivate criteria for judgment such as "whether it is truly necessary" and "whether it can be used for a long time."

Financial Education Applied in Elementary School Life

Understanding school lunch fees and material costs

In elementary school, they will be able to understand that various costs are incurred, such as school lunch fees and material costs. By knowing that "money is needed to learn at school," a sense of gratitude for learning is also fostered.

Proper management of pocket money

When they start receiving an allowance in elementary school, they can avoid wasteful spending because they have already acquired the ability to plan their spending.

Avoiding money troubles with friends

By having a correct understanding of money, they can avoid troubles such as "lend me money" or "give me money".

Financial education learned together with Mom

View money education as an opportunity for Mom to learn together as well. By showing them how you keep a household budget or sharing achievements like "we saved on the electricity bill this month," your child will naturally learn the importance of money.

Financial education in early childhood is the first step toward your child's financial independence and a rich life. The small steps you take now will become a great asset for their future.

🌟 Introduction to Events Currently Accepting Participants 【Limited Event】 Montessori Kugahara Children's House × Financial and Economic Education Program. A special project following space education by a former JAXA employee and marine research at a University of Tokyo-originated venture!

We foster the "life skills" necessary for children living in the AI era through experiential programs led by financial professionals.

📅 Schedule (2-session set) Session 1: Saturday, September 27, 13:00-15:00 Session 2: Saturday, October 18, 13:00-15:00

🎯 Program Content Session 1: Barter game, allowance game, stock investment game Session 2: Hamburger shop game, foreign exchange trading game, tax game

💰 Participation Fee Enrolled students: 6,000 yen (set price for sessions 1 and 2) General participants: 8,000 yen (set price for sessions 1 and 2)

👨‍🏫 Instructor Introduction Mr. Masayuki Kobayashi

• Graduate of the Department of Economics, Faculty of Political Science and Economics, Waseda University

• Former Foreign Exchange Dealer at Mitsubishi UFJ Bank

• Certified Instructor by the Japan Financial Education Support Organization

Please see this article for more details.

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