At a financial literacy conference, experts were asked how to improve financial literacy levels for people of all ages. They said a four-letter word. Math. Managing money as a number is money math in action. Hands-on experience with physical money makes the numbers in a written account mean something.

You can start teaching your kids money math at your kitchen table before they start school.  Playing with money is a great hands-on way to give kids experience with cash, even though much money today is invisible. And it’s a fun way to sneak math into your child’s day without them realizing it. 

Playing games involves counting coins and exchanging them for dollars. The chapter in my book about cash also includes activities for learning the words and numbers for currency. At the end there is a skills check-list that your kids can take to show they know their money math.

For the activities, you’ll need a dollar worth of pennies, nickels, and quarters for each child. Because money is well-traveled I took to “laundering” our stash with detergent. Playing with real money provides pattern recognition and makes math meaningful.

Kids think that a nickel is worth more than a dime because it is bigger. Yet it takes 20 nickels to equal a dollar, but only 10 dimes. An effective method to teach coin values is to have your kids exchange 5 pennies for a nickel, 10 pennies for a dime, and 100 pennies for a dollar.

Interesting to note that paper bills are all the same size; the numbers confirm their value while the portrait provides a unique image.

Common Core Math Standards place the first exposure of money in second grade. You can give your kids a head start before they learn about it in school. When math is taught in the classroom, many students absorb just enough to get by. Math is often dismissed by students as not being important in real life.

A study published in November 2021 found that people who are better at math make more money and are more satisfied with their lives than people who aren’t as mathematically talented.

Hands-on activities to teach math concepts

Playing games with cash involves five math concepts that are important for understanding and using money.

• Addition: Adding cash or depositing in an account increases the balance, resulting in more money.
• Subtraction: Removing cash or withdrawing from an account reduces the balance, resulting in less money.
• Constant: Values of coins and bills never change. A nickel is always worth five cents.
• Equal Value: The combined value of coins is the total money value, not the combined number of coins.
• Interchangeability: Any equal assortment of money can be used in place of another of equal value.

Interchangeability can be a tricky concept for young kids. They really believe the bigger coin is worth more. Playing games with the multitude of coin combinations shows them what interchangeability is. Did you know there are more than 240 ways to make change for a dollar using pennies, nickels, dimes, and quarters? This is without the half dollars that are no longer in production.

When my youngest wanted to deposit her Susan B. Anthony coins in her bank savings account, we discovered another twist to this concept. As we pulled up to the drive-up window her older sister told her that she would never, ever see those coins again. Clutching her coins in her hand, my daughter wailed at me, “You said the bank would give me back my money when I asked for it.” Oops, I hadn’t explained that money in the bank was interchangeable and she’d get the same value back, but not the same coins.

Money math makes sense

When your kids keep track of their own money in a written account, the power of adding and subtracting hits home. By using money math your child sees how every money decision changes the balance.

Spending decreases the balance and makes the number smaller. Every deposit increases the balance and makes the number bigger. A decision to not spend (defer spending) keeps the balance from changing.

Learning to manage money as a number is the skill your kids can learn now. No amount of looking at a pile of cash or a shaking a piggy bank will teach your kids the power of adding and subtracting the numbers. 

Allowance anecdotes

Counting with coins: My kids learned to count to one hundred using nickels, dimes and quarters. I’d hear them chanting: five, ten, fifteen, twenty…  

Money exchange: I started paying allowances with coins. We’d play money games to find out how to make a collection of the coins equal to one dollar. Then I’d give them the dollar bill and they’d hand over the coins. Seeing the transaction showed them coin combinations with equal value.

When your kids track all their money as a number, they become better money managers.

Read more: Piggy banks are cash only…

Watch on YouTube

Next: Starting an allowance with preschoolers that will be educational for years