If you have been following our financial education posts, you will have read about the research on the way our financial habits develop. They are already formed by age 7

This means that a 4 or 5 year old is at the perfect developmental age for learning life-long financial skills, giving parents a great opportunity to set their children on the right path. 

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It might surprise you how fast preschoolers can master the art of financial enterprise, especially if they followed HootLoot's financial training when they are toddlers.

 Here are some key concepts that are useful to learn at this age:

  • The difference between "needs" and "wants" 
  • The concept of trade as a basis for the way our society works and the role of money as an intermediary
  • An appreciation of the benefit of delaying immediate gratification, in exchange for a better outcome in the future
  • The Maths involved in using money.

All the skills required for budgeting, pricing, saving and investing ... are all there! 

These concepts may seem too complex for young children, however through play it is possible to turn them into simple and fun learning activities.

This week we are focusing on the first two concepts and next week on the last two.

Playful ideas to learn financial responsibility: Part 1.


If you want your children to understand the difference between "wants" and "needs", you have to start by watching your own language !  How many times do we say "I need" this, or "I need" that? For a whole day last week, I evaluated every time I used the word "need".  To my surprise the majority of my "needs" were in reality "wants". 

Since then whenever I slipped, I immediately corrected myself: "I don't really need a new pair of shoes, I should have said that I would like a new pair of shoes”.

 You can use everyday situations to get your preschooler to understand the difference between “needs” and “wants”. You can explain that “needs” are more important and should generally always be considered as a first priority (I need to buy a coat to prevent catching a cold in winter), but there may be lots of "wants"!  


 Role-play is such a good way for children to learn and to understand complex situations. And as their baggage of experience increases, more layers of complexity can be added to their games. For example, just as your toddler can have fun displaying colourful objects on a shelf and handing them to you, a pre-schooler is certainly able to execute real transactions with money.

hootloot, financial education children

We played "shops" the other day with our 4 year old with a wooden toy pizza. I was quite surprised to acknowledge how perfectly he understood the mechanism of trade.  I pulled out some coins, went to his shop and asked how much was a slice pizza. He immediately said "two pounds !". I handed him two coins and he put them on the side, then asked his little sister for two pounds as well. He was even able to give me a discount as I complained that the price of a single piece of topping was too high (he wanted two pounds for it as well, but after my comments settled for one pound!).

hootloot, financial education children

Stay tuned for more fun actvities in part two of Financial Education for Preschoolers! 




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