My kids don’t quite understand the concept of money yet. It’s hard to grasp because they don’t have to pay for anything luckily. They also don’t understand what it takes to earn money, but I’m trying to slowly teach them concepts about it.

The other day, my 5 year old daughter was asking for things on her birthday wish list. I was trying to explain to her that we shouldn’t always think about buying new things when we already have enough. If she wanted something new, she would have to donate something that she already has. My daughter already understands that requirement and I also wanted to explain why we couldn’t get really expensive things (and why we should save our money).

My daughter loves flowers and plants (similar to my wife) and I told her that money is sort of like a plant. If we let the plant grow without taking anything from it, such as leaves or flowers, the plant will continue to get bigger. Money works the same way I explained to her. If we let our money, sit there without spending it, it will continue to grow bigger and bigger just like a plant. My daughter had a look that showed that she was processing the information. She ended up explaining it back to me and asked me tons of questions about it because her understanding of money was whether we have it or not. She never knew money could grow. I talked to her about investing and saving a bit in a way that a plant would grow (if it gets enough water and sun). If we did the right things with our money (and saving and investing were like water and sun), the money plant would grow also. Then we could eventually trim a bit of the flowers off when it was big enough and it will continue to grow faster than we are trimming (at least that’s the dream!).

My daughter thought about the concept on the rest of the ride home. I could see that she was starting to understand why it was important to not spend your money, especially on things you don’t need. I also told her the most important thing - if you saved enough money, it would help weather some bad times. I’m just planting the seed early and hopefully financial discipline is something that will be engrained in them (and continue to grow and flower!).