My 5-year-old is already better at money management than I am
My daughter spent 45 minutes in the Target toy aisle comparing toys to maximize her $25 gift card.
Gift cards can be a powerful tool for teaching kids financial literacy.
She also saved an Amazon gift card balance to buy a bigger toy — a lesson in delayed gratification.
On a trip to Target last September, my 5-year-old sprawled out on the floor of the toy aisle, her birthday gift card dangling from one hand while she weighed her options. A Barbie in a sparkly dress to her left and an assortment of tiny Ily doll accessories to her right — shoes, purses, and the world's smallest laptop. "The Barbie's pretty," she said, "but I could dress up my doll a million different ways."
My child is not yet in kindergarten and was doing a cost-benefit analysis.
She made a great choice with the money she had
I'm the person who sees my checking account balance drop and thinks, "We should eat at home." Meanwhile, my daughter is turning into a miniature accountant when considering how to spend $25. Unlike my credit card — which she considers the magic card that buys anything — her gift card came with limits she understood.
That Target moment was just the beginning. After 45 minutes of comparing prices and possibilities (and lots of parenting patience), she chose the accessories. "This way," she said, "I can play with my doll different ways every day instead of just having one new doll."
Gift cards continue to teach my daughter lessons
Through gift cards, my daughter has learned financial lessons I'm still struggling to apply. After weeks of playing with her doll accessories, she told me, "I'm glad I got these instead of the Barbie. I can make up so many more stories this way." Sometimes, the practical choice really does beat the pretty one.
When the holidays rolled around, she received an Amazon gift card and, with it, a new lesson about money. She spotted a $40 unicorn-themed craft set on the site, and I braced for the inevitable meltdown. Instead, she looked at her $25 balance and said, "I'll wait for my next birthday money."
A week later, a late present arrived in the form of another gift card. She remembered the unicorn-themed set — something I can't even do with items on my own wish list.
The day her second gift card arrived, she ran straight to my laptop and said, "Now I can get the unicorn craft set!" The excitement in her voice made it clear — delayed gratification wasn't a burden, but part of the fun. She'd discovered that waiting makes something more special. A budget, to her, wasn't a restriction; it was a plan. She didn't see it as a list of things she couldn't buy, but as a way to get exactly what she wanted when she was ready.
I'm hoping her wisdom rubs off on me
I've gone through cycles of steadily saving money and then burning through my bank account more times than I care to admit. But when I was 9, I learned my own savings lesson at an arcade. Determined to win one of the massive stuffed animals perched on the skeeball machines, I hoarded tickets for a year instead of spending them on erasers and bouncy balls.
When I finally counted them at age 10, I still didn't have enough — but the arcade manager, impressed by my dedication, gave me the stuffed lion anyway. The lesson should have been about saving and planning. Instead, I mostly learned that stuffed lions don't fit in cars.
At 39, watching my daughter methodically plan her gift card purchases is reemphasizing those lessons.
Recently, we went back to Target; this time, she spent exactly three minutes picking what she wanted. "I already know how much everything costs," she said, like it was the most obvious thing in the world.
Meanwhile, I'm trying to figure out how we spent $200 on "just a few things."
No, my daughter doesn't yet understand complex financial concepts like compound interest, but she understands that money isn't about how much she has; it's about how thoughtful she is when she spends it.
Maybe her wisdom will rub off before my impulse dollar section purchases.
Read the original article on Business Insider
