The Value of a Coin: Learning How the Economy Works

Someone placing a coin into a piggy bank.

Photo by maitree rimthong

Money makes the world go round, as they say. Yet, not everyone knows how the economy works. This is extremely odd. How can we have an opinion on it if most people don't even know how or what it is? We all like to think that the economy is when prices go up or down, but that is a very shallow understanding of a very complex subject.

The economy is deeply embedded in the normal functioning of our society and of our lives. From buying groceries to understanding the importance of the GDP to knowing what politicians are talking about, proper economic literacy is pivotal in helping us shape our lives. Recognizing that this is the case, it is crucial to help children understand economic concepts as early as possible.

Learning How the Economy Works

A child picking up coins to save.

Photo by cottonbro studio

When children are economically literate for their age, we are actually giving them the necessary tools to make informed decisions about their finances. At the same time, we are helping them know more about the world at a very fundamental level. Having a modicum of knowledge on important concepts like supply and demand, scarcity, and opportunity cost allows children to understand the value of a coin and how to make a financially sound and economically viable decision.

This is best shown in the example of a child wanting to buy a popular but expensive toy. Not all parents can afford every toy their child wants. But by teaching them how supply and demand works, you let children know why that toy has to wait until enough money has been saved or there is a sale going on. Furthermore, this helps them appreciate their other toys more while also instilling in them very important economic values. That is why books for children like Bungles Loses His Marbles, where author Sean Nelson presents economic lessons at the level for children, are important.

Knowing the Value of a Coin

While at its core, economics is about money, it is more than just that. Within the economic systems that control our lives, there is a complex internal and external structure that involves the input of millions and millions of people. Now, understanding this complicated entity involves more than just knowing that some coins have more value than others. To comprehend economics, a child has to be critically thoughtful and know how to solve problems. These are also important in navigating the many challenges of life, not just those that are financial. Do you see where we're going now with this?

A child picking up coins to save.

Photo by Tara Winstead

Promoting the Value of a Coin

Understanding broader economic trends not only helps you personally but also helps you to understand how society is doing. As was said earlier, money makes the world go round. The flow of commerce is foundational for a working civilization. It governs how government policy is enacted, how families have to go about with their lives, and what nations should do to improve their communities. You may not like it personally, but it is a fact of the world that money is pivotal to the flourishing of humanity. By letting them develop a sense of economic awareness, a child can grow up to be an active and informed citizen who actually engages with the world rather than just being pulled along its current state.

The Future Value of a Coin

While teaching your child how to be economically literate may not immediately show results, it will be extremely beneficial for their future prospects. Whether it is knowing the best payment plan, calculating the pros and cons of a job offer, or whatever else, learning about the economy at a young age will be a tenfold return on investment.

Teaching economics to children is not just about helping them understand the world, nor is it only about setting them up for future success; it is giving them the tools to engage with the world on a better footing. The world is mind-bogglingly interconnected and complex, and to thrive in it means knowing how it works. It means being a critical thinker, a problem solver, and a socially responsible individual. Economic literacy will definitely help with that.

Sean Nelson's Bungles Loses His Marbles is available for order on this website. Just click this link to learn how!