It gets spent. Parents shouldn't be surprised. Indeed, the personal savings rate in the United States has steadily plunged during the past few decades as the plague of affluenza the condition that includes possession overload, debt and anxiety stemming from the pursuit of more has inexorably crept through generations. Generation X is a carrier, while Generations Y and Z stand at risk of anemic financial futures. Introducing money to children just out of diapers is difficult.
Preschoolers have little concrete concept of money.
Worse, money can throw out of kilter concepts they do understand, says Harvard Medical School clinical psychologist Lawrence Kutner. They find the physical structure of money confusing. That means parents must be aware of their child's developmental limits. But parents can help preschoolers acquaint themselves with money. Let them handle and count money during simple cash transactions.