What does the economy do to us? There are … Finally, the child should understand that both goods and services cost money. Thus, we need to transpose notions involving economy at a nationwide or global level, to a smaller scale. Is it a need or a want? Depending on his or her answers, see if some of the activities clearly overlap. However, when you get the feeling that he’s understood what you’re trying to say, give the kid a more complicated question. A good idea is to mix the profession with the goods that the respective profession deals with: vegetables vs. farming, books vs. bookkeeping, or even a football vs coaching a football team. At the end of this small lesson, make a larger list – either on the computer or on a piece of paper – of other intriguing things that are somewhere in between the two. So, if he wants to open a football team, he’s going to need money to pay for all the incredibly important members of the staff and their services. When you can stimulate a child's brain in an enjoyable manner, you increase his or her chances of understanding and retaining information. If you want your children to have a better chance at financial prosperity, browse through our bigger guide to kids and money. Start simple with toys like making pretend money, teaching your child basic concepts of finances. It’s the best picture we could find – sorry. The Monopoly game is also a great way to introduce basic principles of the economy. Well, in the actual science, researchers talk seriously about the differences between what different peoples want, how they can acquire their needs, and which of these needs are actually paramount to their existence. While there are many reasons why kids should learn about the economy, one of the most important reasons is because they will grow up to live in this economy; therefore, they need to know about our country's financial standing and outlook. It is your responsibility, as a parent, to make sure your kids know about the economy. Basic economics is actually pretty easy to understand if you put it in the right perspective. Required fields are marked *. One of the first things that kids need to understand about economics is that it’s not only a question of money. Pick up things that he uses in his daily life. But forget all that. What happens if the economy gets better? To make your kid understand this basic concept of economics, you have to make sure you yourself first understand what it means. It’s as important as learning about social groups, family dynamics, and ecosystems, because economics affects these relationships as well as others around the world. Ask your kid what he wants to do tomorrow. The games feature options to buy and sell, and the success of a player depends on their ability to balance short term gains with long-term goals, exercise restraint, and strategize how to make the most of the resources they have on hand. Your email address will not be published. Ask the kid: “What would you rather be doing instead of going to school?” The answer to this should be overwhelming. You can take your kids on family field trips to any place that displays or explains economic principles. Here are ten ways you can make economics easier for them to understand: Another way to help your child understand and retain information is to talk about the topic frequently. Two of these ideas are those of need and want. For example: what is cake? This one is a little more complicated. Consumers are free to buy whatever product they want. How do you simplify economics for kids? Answer Every Question With a Child-Friendly Explanation, 8 Lessons to Teach Your Child About Using a Credit Card, Teaching Kids About Money First Starts With Opening a Savings Account, How to Teach Your Kids to Be Financially Successful Adults, What Teens Need to Know to Start Investing, Teaching Kids About Money Is One of the Best Gifts. The basic concept is that a need is something that a person requires in order to survive, while a want is not necessary. As with the previous category,  make a list divided in two sections. But the basic principles are there. So, from a group of playing football, playing video games, going out with friends, and watching a movie at the cinema, your child may choose going to the movies because a specific movie is out. The economy impacts unemployment rates, financial benefits, college education, and job growth rates. Opportunity cost is, basically, the opportunities you give up in favor of doing other stuff. Your children will have a hard time understanding mature words and phrases. After a few examples, your child should have gotten the basic principle of the equation by now, and will answer accordingly. Now explain to your kid that playing video games represents the opportunity cost that going to school implies. Hopefully, these tips will help you know how to teach your children about the economy. When they have questions, you need to do your best to explain yourself in very simple words and terms. This is especially important if you want to teach your kids economics. There are some issues that are a little broader than just basic financial education. Now, to transpose this into a concept in economics for kids, you’ll need to think like a kid. You should continue the lesson with a random toy, or something that is most definitely a want. Economics for kids needs to be a bit less difficult. Explaining Needs and Wants Economics for Kids. Who uses these paper goggles anymore? Notify me of follow-up comments by email. When Is the Right Time to Teach Your Kids About Car Insurance. Economics for kids is not an easy subject to teach in your home. At the end of these lessons, your kid should know the difference between a vinyl football and a football team. Games such as Monopoly, Minecraft, and Stardew Valley feature economic systems that allow kids to have fun while seeing how an economy works. What happens if the economy gets worse? Madison DuPaix created MyDollarPlan.com, a personal finance website, and has written on career planning and finance for the Mint Life Blog and Fidelity.com. Or better yet: use school. No, you won’t be explaining money transactions to your kid. We’ve talked about answering kids’ questions about money. Make it fun: you can eat an apple, you can wear a tie, but you can’t eat teaching, or wear it. After that, you can talk about topics like debt and revenue, explaining what each term means and why the terms are important to know. Don’t hesitate, as it will show that you don’t really care about school. Take Your Kids on Field Trips . Two of these ideas are those of need and want. You can also add services to spice it up a bit. Because opportunity cost is not necessarily represented by something material. You can even use a display that is not focused on the economy by relating it to your children in economic ways. Please feel free to suggest interesting topics to us – we’re sure to give it a try! What does it take to make the economy better? Juice is good, but is it a basic need just as water is? We’ve even talked about the ways in which a kid can make money. Your email address will not be published. This website uses cookies to ensure you get the best experience on our website. You know your child the best, so you already know what you can say to make them understand. Market - A market economy (sometimes called a "free market") is one based on supply and demand. 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