Fostering independence: understanding money management
For children, teenagers, and young adults with disability understanding and managing money can be challenging due to difficulties with impulse control, planning, organisation, working memory, fine motor skills, and specific learning disabilities. Therefore, these individuals may require more support when developing their money management skills, or adaptations to support their independence.
It is also important to note that the financial world is more digitalised than ever. With the majority of us utilising online banking to manage our finances, children not only need to learn about coins and notes but also about contactless payment and online banking.
What skills does a child need for successful money management?
FINE MOTOR
Developing a child’s fine motor skills, such as in hand manipulation and pincer grip skills supports the independent sorting and
use of cash. Encouraging engagement in activities in which a child must pick up, manipulate, and sort small objects, helps to develop the fine motor skills they will need.
Activity ideas/ games:
- Using tongs and tweezers to pick up pom poms or other small items develops hand strength.
- When playing Connect 4 place the coin into the child’s palm and have them move the coin to the tip of their fingers without using their other hand or a stabilising object.
- Threading and beading activities develop in-hand manipulation skills and strengthen a child’s pincer grasp.
*Please consider the safety of the child, including the choking risk when playing with coins and other small objects.
EXECUTIVE FUNCTIONING
Executive functioning skills (or cognitive skills) are important when looking at developing good money management skills, such as planning, problem-solving, sequencing, impulse control, and working memory.
When seeking to utilise money a child is required to plan how much they have and identify how much items cost, add up the correct amount of cash and the value of multiple items, identify problems, and solve these problems (i.e. not having enough money and choosing what to buy/ not buy). You can support this by:
- Playing games that require working memory (matching games or the shopping list game).
- Encouraging problem-solving by allowing your child to identify and attempt to problem solve on their own.
- Providing opportunity for decision making e.g. provide a small amount of money and support your child in making choices between items.
- Break down the steps and form a list or visual schedule to support sequencing.
What about the maths?
For some children the mathematics required to add coins to the correct amount, understand receiving change and budgeting can be difficult and it’s important that support is provided to not only develop these skills but also adapt money management for the child, depending on their needs. For children with difficulties with fine motor skills or for children who have difficulties understanding how to count the correct amount of money out, a debit card when developmentally appropriate may be a better option to support their independence.
Tips to build money management skills
STARTING THROUGH EXPLORATION
Teaching children about money can start at a very early age, beginning through the simple exploration of coins and notes. This exploration allows a child to become familiar with the different types of money, including their size, shape, value and colour. You can do this by:
- Placing coins into a sensory bin with rice for the child to find.
- Using cardboard to make a coin- matching activity where the child must slot the coins into the correct hole.
- Placing coins into a Ziplock bag with some clear glue and have the child sort the coins using their fingers (we suggest taping the bag closed so the child can’t open it).
Once a child is engaging in pretend play, playing games like shop allows a child to explore the concept that money is exchanged for a good. This can be expanded to exchanging money for a service; incorporate the child’s interests i.e. for a child who likes dolls set up a dolly spa! Furthermore, children learn from watching and experiencing different situations, such as watching their parents pay for groceries. If able, give your child the money and get them to give it to the cashier to involve them in the transaction. Alternatively, at the self-serve checkout, get them involved in scanning and paying for the groceries.
DISTINGUISHING VALUE
Once a child understand that money has value, they can then develop their understanding that different coins and notes have different levels of worth. Begin with sorting coins and talking about how many of each coin you need to make the same amount e.g. 2x 50c pieces is the same as a $1 coin.
It’s also important to consider that different items have different levels of value e.g. an apple vs a TV. When engaging in pretend play, try and value items relevant to each other e.g. a banana is cheaper than a large toy. For slightly older children, when shopping use examples like 5 apples cost the same as 1 packet of chips to help develop their understanding. Another way to support this is by giving the child a small amount of money and then supporting them to decide what they want to spend it on e.g. 1 more expensive item or 5 cheaper items.
LEARNING ABOUT SAVINGS
Teaching children the value of saving is a crucial part of money management. Start by introducing the concept of “saving for later” in a tangible and engaging way. This helps them understand the difference between immediate spending and delayed gratification. Here are a few tips:
- Create a savings goal: Work with your child to set a simple and achievable goal, such as saving for a new toy or a special outing. Use visual aids like a chart or jar where they can see their progress as they save.
- Introduce the concept of needs vs. wants: Use everyday examples to discuss the difference between things they need (e.g., lunch) and things they want (e.g., a treat). Encourage them to allocate money towards needs first, and then save for wants.
- Make saving fun: Use a clear piggy bank or savings jar where they can physically see their money grow. Alternatively, for older children, open a kid-friendly savings account and show them how to track their savings digitally.
Online banking and cashless payments
In today’s world, many of us utilise electronic banking. Thus, for the children of this generation, their world will likely be relatively cashless. There is a new need for children to be educated about online banking, credit cards, debit cards, and even concepts such as contactless payment. Educating children about how these systems work is crucial to support their financial literacy and independence. You can do this by:
- Utilising online banking programs for kids such as ‘Spriggy’ which provides children’s bank cards with online banking accounts that support budgeting and can be a helpful tool for children entering the world of online banking.
Individuals with disabilities are statistically more likely to be the victim of online scams. Therefore, it is important that individuals are educated and aware of the different types of scams that can occur, such as scam emails promising employment, phone calls about lottery wins and others. For individuals who are at risk, setting up a system with a trusted person can ensure the individual is safe and not passing on their personal details or pin codes to scammers.
Resources
The following resources support children and teens in learning about money and developing their financial literacy.
- Kmart Play Australian Money https://www.kmart.com.au/product/play-money-australian-notes-and-coin-42979319/
- Kmart cash register toy: https://www.kmart.com.au/product/cash-register-42885092/
- Spriggy bank cards and online banking for kids: spriggy.com.au
- Online games:
If you are concerned or are unsure how to support your child in developing their financial literacy, please speak to your child’s therapist, or contact Occupational Therapy Helping Children at 0299 133 823 or [email protected]
—
Occupational Therapy Helping Children is a specialist team of occupational therapists in Sydney’s Frenchs Forrest dedicated to helping children thrive, offering one on one supports, as well as parent workshops and teacher training sessions. occupationaltherapy.com.au
