I shared a story about how we would give our kids a fixed amount of money when we’d go on vacation. If we gave the kids $20, they learned quickly that if they spent all that money, then they wouldn’t have it for anything else they might want.
On one trip to Arizona, we gave the kids $20 and told them that was all they could spend – but they could spend the cash on anything they wanted to, no questions asked.
My son, Michael, really wanted this book, “Amazing Arizona,” which was a book of mazes set in Arizona themes (like the Grand Canyon, desert, etc.). But the book was $8 and he didn’t want to use up so much of his $20. Eventually, he decided not to buy it – but continued to look at the book in every store we went to. When I asked him why he didn’t buy it, he said, “But once I do the mazes, I’ll use up the book and my money will be gone.”
I would up buying the book for him at the airport on the way home. I felt he had really learned his money lesson.
What are your favorite ways to teach your kids about the value of money?
Brian offered his kids a dollar for every bucket of pinecones and sticks they picked up. They spent four hours and earned $6. The next day, one of his kids was at a soccer game and wanted a $2 treat. Brian said “That’s two buckets of sticks’ worth of candy. Are you sure you want that?” He said it really helped his child connect the value of a dollar with how hard it is to earn that dollar.
Loretta said she has always been really honest with her son. She shows him the checkbook and how to balance it, and that she started when he was 11. But to really get things on his level, she took him to a video game retailer where he could learn about depreciation. Once he saw that his beloved $60 video games were being bought from him for $5, he realized he’d rather buy used games for $10. She said it’s been an amazing lesson.
Sandy finally let her son spend 25 cents in a gumball machine. And because the boy didn’t get what he wanted, and she didn’t give him any more money, he realized that money doesn’t always buy you what you want and you can’t waste it. He has never asked for it again. Now, he’s 27, married and she said he and his wife have more money saved than she and her husband. She likes to tell her kids: With two incomes, live on the first, plan with the second.
Cathy’s daughter wanted to go to eat at favorite sit-down restaurant. Cathy told her that she would have to work for 4 hours to pay for the meal. Her daughter thought about that and said, “Mom, I don’t want you to have to work so hard. How long would it take you to earn enough for two Happy Meals?” Cathy’s daughter is 19 now and when she can, she offers to treat her mother to dinner.
Sue Ellen said: “My father was a single dad and raised 3 of us with a debt-free mentality. We lived a cash-only lifestyle, and he didn’t really have credit cards and we grew up in a small town in Alabama, without the same temptations. I’m in my 40s and just had my first child and I’m still living a debt-free life and it has given me tremendous opportunities.”
Richard has three little kids: 5, 7, 9. “We wanted to teach about money by giving them an allowance in exchange for doing chores. But they didn’t make connection between chores and money. We’d take them to the store to spend their money but they still didn’t get it. We got them each a jar and when they did their chore we immediately gave them money to put in their jar to save and to spend. Now they understand the value of a dollar. Next, we’re going to teach them about earning interest on their money.”
What’s your best idea for how to teach kids to save money? Please share your answers here.