Family Money Matters

Economic Vocabulary and Concepts for Preschool Children

Choice—what you want and what you will give up
It is important for young children to be able to make choices and experience the results. Children can learn to make good choices and live with the results (Poor choices lead to consequences - not happening the way we want it to - young children can understand this concept also).

Consumer—a person who uses a good or service
The best way to learn to become a wise consumer is to practice. Children can consider: How long will it last? How many ways can it be used? Do I really want it? If I spend my money for this, will I have any left for other things?

Demand—the amount of product that consumers are willing and able to buy Children can count (use a simple math concept) when they answer the question, How many do we need?

Goods—something that you can hold or touch
Goods can be bought with money.

Money—what people use to make trade/barter easier
Children as young as 4 and 5 years of age are aware of the use of money. They see people use money to buy goods and services. Children see their family buying groceries, paying for gasoline for the car and using money to buy things they need or want.

Producer—a person who makes a good or provides a service
Producers usually are paid helpers and workers.

Scarcity—when there is not enough
Every child has wants. Children learn that wants are unlimited and choices must be made between wants and needs.

Services—something people do for other people
Children may never see the exchange of money for services. Children can learn about services their family use. Some services are provided by taxes.

Specialization/job diversification—people who do special work need special skills People do special jobs. It takes resources and special skills to produce goods and provide services to consumers in an economic system.

Supply—the amount producers are willing and able to sell
Children may recognize, How many do we have? How many have we made?

Trade/Barter—giving one object/service to get another object/service

Adapted from Sprouts: Preschool Economics Through Dramatic Play, Kentucky Council on Economic Education 2005.

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