After learning how to better handle our finances, we decided it was past time to teach our children the same concepts. But with little to no extra cash laying around for allowance we chose to created our own “fake economy“, as my hubs likes to call it.
Our Fake Economy: Teaching Preschoolers About Finance Without Using Money:
When my oldest was 3.5 years old, she went through phases of responding of not responding to different methods of discipline and/or rewards. Now that she’s 4.5, not much has changed but we’ve been using a method since then that we like to call the “Fake Economy”. The past years its morphed quite a bit but right now, The “Fake Economy” works like this:
- Every time Maggie does her chores all by herself (no begged-for assistance from mom and dad who are juggling the younger babes) she ‘earns’ a bread tie. Bread tie? Yep, I learned this from a psychology teacher in college. We’re talking the simple square/rectangle plastic things off the end of a bag of bread, potatoes, apples, etc. I’ve been collecting the for years. These are free but can teach the same concepts about money to younger children with no threat of them losing cash.
- She can “earn” bread ties by doing her daily chores. Right now she makes her bed and puts the “girl’s room” {she & her sister’s} laundry away daily or when asked but no back pay for 3 days of laundry put away in 1 day. 😉
- Extra bread ties may be earned when she does extra chores such as:
- Washing Windows
- Dusting
- Sweeping
- Cleaning off/wiping down the table and counters
- Feed the dog {rather than her daddy}
She also earns bread ties for other tasks I’ve ask her to do or she finds to help with. She doesn’t earn them for everyday things we expect her to do, such as cleaning up toys when she’s done playing, brushing her teeth, clearing her spot at the table.
Once she earned a bread ties, she places them in her cupcake shaped piggy bank. When she’s earned several {or at the end of the week} we let her get them out and “budget them”.
- One for GOD
- One for SAVING
- One for SPENDING
This has been a great way to begin teaching her about finances! On Sundays she trades in her bread ties from her “God bank” for one penny each but we recently upped it to a nickle {she’s learning to count by 5’s} now that she’s older. She then gives the “God bank” money as an offering, to our church to use for ministry.
We used to just let her buy things using her bread ties but they were always things that didn’t really cost any money, like an extra trip to the library/park, or a grocery run with just her and one parent. Now we are letting her “trade in” her bread ties from her other two banks as well since the asking-for-items-at-the-store-phase has begun. We want her to understand how much things really cost as well as have the confidence that comes with finally buying something all on her own, whether that’s a gumball or a doll.
I challenge you to start thinking of a creative way to teach your child about finances. Maybe this summer could be a slow enough time in life to start. I hope you can see “money” doesn’t have to get in the way of a great teaching opportunity.
What do you do to teach your preschoolers about finances?
Read more on this topic with these posts!

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- Easy Steps to Get and Stay Organized in Under 10 Minutes -
- 5 Ways to Build an Emergency Fund with Very Little Money -
- Creating An Inviting Atmosphere In Your Home -
- Mouth-watering Garlic Herb Cheese Bombs -
- Animals And The Creativity Of God -
- Game Day Recipe Round up! -
- Heart-breaking News and How You Can Help -
- Quick & Easy – Planning For Your Best Day -
[…] can be a tool for servant-hood as well. We choose to give an allowance simply to allow us a tool to teach our littles about finances. The wages are based on the child and level of understanding and so far, we’ve only worked […]