Teaching Kids About Money

[swamp]

I remember when I was little watching my parents pay for everything with cash, counting the cash, etc. etc.

I now pay for everything with credit card. My kids are 3 and 4, and I don't think they realize what money is. They are fully aware of what a credit card is, though.

How do I translate the swiping of the credit card to spending money for them?

Or am I worrying too much about this?

[soon2bmomof3]

I am starting to wonder the same thing. I stopped at McDonald's today for breakfast and used my debit card. DS (3) from the back seat "You paying with a credit card, Momma?".

I didn't bother correcting him...but should I have?

[BeenThere...DoneThat...]

...how about putting a sign on the fridge, and "move" markers from the left side to the right as you make purchases at the grocery store or restaurants... that way the kids see the object lesson of "we have so much to spend on food each month, and it counts down as we eat" or something like that?

[swamp]

Jan 11, 2011 14:36:38 GMT -5 BeenThere...DoneThat... said:

...how about putting a sign on the fridge, and "move" markers from the left side to the right as you make purchases at the grocery store or restaurants... that way the kids see the object lesson of "we have so much to spend on food each month, and it counts down as we eat" or something like that?

that would require me to have a budget!

[BeenThere...DoneThat...]

...hey, the kids don't need to know that your numbers don't add up...

[Anne_in_VA]

Or that you don't have a budget!

[thyme4change]

I don't worry about using a credit or debit card - it is what it is. When the kids ask about it, I explain that I still have to pay for everything. We usually talk about the price of things. My kids still don't know what is "a lot" of money, but it is a hard concept to grasp, because sometimes $100 is a LOT and sometimes it is a pittance - depending on what you are buying.

[Clifford]

My 10 year old son has pretty good money sense , but Hannah Montana has destroyed my 7 year old daughter's appreciation for frugality. HM...and the fact that my wife and I are bad about leaving stray bills lying around.

[The Home 6]

Just this morning my 4 year old saw a billboard for Chik-Fil-A and immediately asked, "Can we have Chik-Fil-A for lunch?" I told her no, because we have food in the house, and going out for lunch is a special treat. I tried to explain to her that Mommy and Daddy try to save as much money as they can, but I think it went over her head. I tried to equate us saving money with her saving her birthday money for something she wants, but if anyone has any other suggestions for how to ingrain savings into the brain of a 4 year old, please let me know!

[thyme4change]

My kids aren't old enough yet to know if I have been successful at teaching them about money - but the thing I find with this (and other complicated topics) is that the first how-many-ever discussions will go over their head, but you have to just keep having the conversation, and keep having the conversation, and keep having the conversation. They must piece this together - it isn't a case where you can sit down with someone, have a 5 minute discussion and all of a sudden they understand money management. If that were the case, this nation would be so jacked up!

[Abby Normal]

Jan 12, 2011 11:03:13 GMT -5 The Home 6 said:

Can we have Chik-Fil-A for lunch

When my kids were younger, I went straight for the health food comments, rather than making it about money. I saved the money comments for when they wanted toys and such. It seemed to work.

My 9 year old is a miser so maybe it worked too well.

[thyme4change]

I also agree that not eating fast-food should be more about health than money. You can incorporate money discussions into just about everything. All you have to do is watch a single bank of commercials to find 3 or 4 discussion points for money. But evaluating healthy choices are slightly more limited - you might only get 2 discussion points from a single commercial break. #wink#

[The Home 6]

Wow, I didn't even think about the health food aspect of it, thanks guys! And thyme4change, I agree that if a 5 minute discussion was all it would take, the country wouldn't be in so much debt!

[Abby Normal]

We started giving our kids allowance at a young age to help teach them about money. When we would go shopping, they had to spend their money. If it was something educational and worth the money, I'd buy it. But if it was some crappy toy, they had to use their money. They had to make the choice. My son saved his money for a long time, then spent it all on a fake rifle that made noise. It was about two weeks before he came to me and said that he shouldn't have bought it. Lesson learned- don't by on impulse.

We are going on vacation for spring break. They've both been saving their money for souvenirs that know I won't buy.

[so1970]

there is a monopoly game that uses credit cards instead of cash and that would show them that even though you use a card it still comes out of your balance.

[soon2bmomof3]

agilemom,

how old and how much did you start their allowance at?

[Abby Normal]

I think we started at 4 because that was when they discovered things THEY wanted. We started out with 2.00 a week, but they had to put half into their piggy banks. We are years later now, and they still automatically put half in their piggy banks (which eventually goes to the bank).

They both got money for christmas from various relatives. My 9 year old got a total of $60.00. When we got home, I told him to put it "away". When he came out I asked him what he did with it. He put 20 into his piggy bank, 20 in his wallet and 20 into his vacation money. That really surprised me, because I have always said that gift money could be used however they want. I expected it all to go in his wallet for a video game he's been wanting.

[The Home 6]

My older daughter wants a tape measure of all things...she just turned 4, perhaps it is time to start an allowance for her.

[NomoreDramaQ1015]

I used to be fascinated with tape measurers. Drove my grandpa and dad nuts because I liked to pull it out all the way and then watch it bend in the middle.

I was finally given a really old one my grandpa didn't use anymore so I'd quit ruining their good ones.

Ahh. .. memories.

[Sum Dum Gai]

How do I translate the swiping of the credit card to spending money for them?

Explain it a few times and maybe wait a couple years. They'll get it. Or start using cash, but that's obnoxious.

If anyone has any suggestions for teaching kids that just because we can afford things doesn't mean they aren't expensive I'm all ears. I tried going with this is how long I have to work to be able to buy that, but that backfired on me a little bit. I mean, it isn't that unreasonable to work for a couple hours in order to pay for a sushi dinner. The kids obviously felt that 30 minutes of my work was completely reasonable to get Nerf guns. Etc., etc.

I think they understood that I didn't want to trade a couple hours worth of work for the sushi dinner, not because I don't like sushi, but because we could eat at home for only a few minutes worth of my work. However, they both felt that trading the couple hours wasn't that big a deal either. I think the lesson would have worked better if I'd lied about how much I made. I should have told them I make $10 an hour. They'd never ask for random crap from TV commercials again.

[sarcasticgirl]

I'm 30 and when I was a child, my parents used checks for things... there was a time I thought that as long as you had checks, you have money. Clearly as I got older, I figured out that's not how it works.
I'd expect it to work the same for Credit/Debit Cards. right?

[soon2bmomof3]

LOL Dark Honor

Yes, 30 mins of YOUR work is totally worth it to them for a couple of Nerf guns, but how long would they have to work to buy them?

[Sum Dum Gai]

Yes, 30 mins of YOUR work is totally worth it to them for a couple of Nerf guns, but how long would they have to work to buy them?

I think that's where we're headed next. I've been tempted to give them a ridiculously huge allowance, but withhold taxes, insurance, rent, utilities, grocery money, etc. I don't think they understand that making $X an hour means you only have a small fraction of X to spend on random stuff. So, I'll "pay" them like $400 a week, and they can see just how expensive covering a quarter of our living arrangements on that would be. They might even end up owing me money every week, at which point I can offer them a loan and we can discuss how interest accrues. Poor buggers will owe me piles and piles of money by the time they're old enough to actually work.

[Abby Normal]

If anyone has any suggestions for teaching kids that just because we can afford things doesn't mean they aren't expensive I'm all ears.

I don't use the term "afford"because it's relative. I simply say I choose not to spend my money on X because... We talk alot about making choices with your money and the quality of what your are getting. My kids see me comment on something being expensive or a good deal, and we talk about what makes it so.

I did a project for my son's cubscout den. They had to do a family finance section and some parents weren't sure how to talk with their kids about money. I gave them all jobs and they had $5K to spend each month. I made up a bunch of cards with various houses, cars, foods, and some luxury's. On the back of each card were the costs of each one. They had to pick a house to live in, a car to drive etc. They had to pay taxes, and could save if they choose. (yes, horror of horrors, I made that optional). Once they made their choices they had to go to their boss (another parent) and pick up their pay. They had to go around the room and pay their various bills, then could spend what was left on luxuries. I made them do this for several rounds, then the "boss" fired" them all. And they had to go around the room and pay the bills with whatever they had saved.

At the end, I asked them what they would have done differently and their responses were spot on.

I'm not sure if that is quite what you were looking for, but I hope it helps.

[Loopdilou]

Jan 12, 2011 16:56:54 GMT -5 Sum Dum Gai said:

Yes, 30 mins of YOUR work is totally worth it to them for a couple of Nerf guns, but how long would they have to work to buy them?

I think that's where we're headed next. I've been tempted to give them a ridiculously huge allowance, but withhold taxes, insurance, rent, utilities, grocery money, etc. I don't think they understand that making $X an hour means you only have a small fraction of X to spend on random stuff. So, I'll "pay" them like $400 a week, and they can see just how expensive covering a quarter of our living arrangements on that would be. They might even end up owing me money every week, at which point I can offer them a loan and we can discuss how interest accrues. Poor buggers will owe me piles and piles of money by the time they're old enough to actually work.

This is perfect! Then I'll never actually have to pay them an allowance!!!