Almost everyone in the country is talking about inflation right now. Since every member of the family should be aware that the expenditure is taking place, they should all comprehend what it means and how it will affect them. Even kids need to know, because, like my kids, they must want something every time we go out. I’ve thus taught them how to read pricing and distinguish between expensive and less expensive options.
Plus, it’s concerning to read experts believe that the rising cost of food could increase the risk of childhood obesity. Now that many things are becoming more expensive, I believe it is necessary to inform my children about the current inflation—what the term means and how does it affect prices. Join me on this journey as I teach my kids about money and inflation.
They Must First Learn About Money
Once my children understand how to ask for items to purchase in stores, I teach them that we must pay with money to obtain them. I’m not going to tell them about money values just yet; I just want them to be aware that a transaction is taking place. Because of this, my three-year-old understands that if she takes something off the shelf, she will first ask me to pay before opening it.
Now that my kids understand they need money to buy things, I’ll gradually teach them the value of money. By the way, the different colours of Malaysian money help my kids understand and remember how much each note costs. Even better, once they understand addition and subtraction, it will be easier to train them to understand how much they need to pay for things and how much balance they should have.
This works well, especially once they start school and understand the value of money. Since they receive pocket money and do not have us parents around at that time to supervise their spending, they can figure out if they have enough money to buy something or if they should get any change after paying. At the same time, I encourage them to save whatever they have left.
Describe How Money Promotes Economic Activity
This is not that difficult to explain because most children know exactly what they want and need when they go shopping, particularly in toy stores. That’s what I have to deal with every time we go into the toy aisle because it’s difficult for my kids to leave with an empty hand. My eldest, who is now nine years old, understands that she does not have unlimited purchasing power. But it can be difficult with my second and third children at times. They’ll start crying as soon as they hear the word ‘no!’
That is how I realise it is important for them to understand the economy and how money works. The simplest way to teach my children about the economy is to explain that it involves various methods of earning and spending money. Basically, when they have money and go to the store to buy something, the kids are spending money, whereas the store owners are making money.
Aside from that, I told them that economic activities can take place not only between individuals but also between large corporations or countries. At the same time, I discuss how we need to earn the money that we want to spend. It’s funny how my two kids always ask me if I’m always in front of my laptop writing to make more money for them. :p
Introduce Inflation and Its Impact on Daily Life
It’s easier to introduce inflation to my kids now that they understand how to spend money and that everything, they want to buy has a price tag. I used NatWest Rooster Money‘s definition and explanation, which stated, “Inflation is a general increase in prices. When a tyre or a balloon is inflated, it gets bigger; when prices are inflated, they get bigger (or more expensive) too.” The site also stated that “games, sweets, sports equipment, drinks, or food cost a little more now than when you first started buying them because of inflation.”
Blowing balloons would be a fun way to demonstrate how inflation works because the children can see how they grow larger and larger. They may find it easier to understand because most children enjoy balloons! I’ve also tried asking them how much money they get to spend now with their pocket money or allowance. If they have to buy fewer items, this is also a good way to demonstrate how inflation has affected them.
Provide Examples to Aid Understanding
The best way for children to understand the meaning of inflation is to show them what is happening now as well as how it compares to previous times. To describe inflation, I used the following examples:
- How, when I was a kid, a curry puff (karipap) was only 10 cents, but now it’s at least 40 cents and, in some high-end restaurants, can cost up to RM2 or RM3 per piece.
- I used examples from my father’s life, such as how, when he was in primary school, he could get a cup of rose syrup drink (air sirap) for only 5 cents!
- Since my children adore candies, I used to tell them that when I was in primary school, I could buy 2 pieces for 5 cents or 10 cents, but they can no longer do so.
- I showed them pictures of people sharing how much stuff they could get for RM50. It used to nearly fill a trolley about 10-15 years ago, but now it won’t even fill a basket.
- Occasionally, when we go to the supermarket or food stalls, my husband and I would play ‘Guess the price 15-20 years ago’ with the kids to show them the price difference.
Looking at how prices have changed over time can help them understand what inflation is all about. I also found a video on inflation that my children will enjoy watching.
Help Kids Develop Good Financial Habits
It is beneficial for children to understand how inflation affects our daily lives and how we budget. When they realise how expensive things are, they must learn to be frugal and save money for rainy days. Furthermore, now is a good time to teach them to be fiscally responsible in all aspects of their lives because everything they do, such as showering with hot water, sleeping in air conditioners, charging gadgets, and so on, involves money. So, by conserving energy, they are also saving money. Oh, and I do bring them to cheap stores that sell stationary sets and toys for RM2.40, so they know we go there to save money and not go over budget.
Teaching your kids can help relieve the stress and burden of wanting to keep your budget as low as possible, especially during difficult times like these. So don’t pass it up, mummies! And as always, hang in there, my fellow mums, we’re all doing great!
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