Today we are talking about teaching our kids about money. Because how many of YOU wish that you had been taught how to handle money a little better, hm?
I personally feel that the starting place for teaching your kids about money is to teach them the value of a dollar. More and more kids these days don’t have a clue what the value of a dollar is. But I don’t blame them when parents are overpaying them for even the smallest of tasks (more on that later).
So. How do you teach them the value of a dollar?
First of all, start them young. When your kids are starting to learn about money and how to count and add it and such, that’s when you should start teaching them about the value of a dollar.
I heard of one couple that gave their children a great visual of this one day. The father had just gotten paid so he took his paycheck to the bank and had the teller cash it out in dollar bills. When he got home he laid the bills out on the table for his two girls to see and told them he had gotten paid today and this is how much money he made.
“What should we do with it?” The dad asked.
The girls, with their eyes big over the amount in front of them, said, “Go to Disney World!!!”
“Well, that might be a good idea,” said the dad, “but first we have to pay our bills.”
Then the dad started taking stacks away saying, “This whole stack here we have to use to pay for our house so we have somewhere nice to live in.”
“This stack here we have to use to pay for our electricity so we can have lights and cold food in our refrigerator and TV to watch.”
“Then this stack we have to use to pay for our water so we can take baths and wash our hands and cook our food.”
One by one the dad took stacks of money away explaining where it had to go and why. And as each stack disappeared from their sight, the girls’ dream of taking the money and going to Disney World was diminished a little more.
At the end there was one small stack of money left over for their family to spend as they wished and it was a far cry from going to Disney!
I love this story because this father gave his girls a great visual lesson of the value of a dollar and also showed them where the hard earned money he makes goes!
I know for us, we are always trying to teach our kids the value of a dollar. Something that’s important to us is that our children know how hard you have to work to earn them as well. That’s why we don’t pay them $10 for pulling weeds from our garden for 10 minutes. That’s like paying them $60 an hour!! Instead we pay them amounts that make sense and are more like what they should expect to make in the real world.
We also try to use money terms that they will need to understand when they are adults. For instance, if we are walking in a store and one of our little darlings sees something they want to buy, we ask them if they have enough money for it. If they don’t we tell them that we can buy the item for them and they can go in debt for it, later they can work off the debt to pay us back.
Never once have any of my children chosen to go into debt! And this has opened up lots of discussion over what debt is.
As my children get older, lessons will inevitably change and even more practical ways of handling money will need to be taught. But teaching our children the value of a dollar is a great place to start!
This post is just the tip of the iceberg about teaching kids about money, obviously. There’s so much more I could share, but why don’t you share below some ways you’ve taught your kids about money. I’d love to hear them!