Monday, August 30, 2010

Kids and Money

As a person, I don't think money is very important. I don't strive to be rich - it's not an ambition of mine. I know if we won 2 million dollars, it would probably make my marriage harder and my life LESS happy. I do strive to save, and I also try to be frugal.

As parents, we take many opportunities to teach kids about money. One of my pet peeves is being asked this question by my stepkids:

"Kate, do you have enough money to buy ______________"

or this statement:

"oh, we can't buy that because we don't have enough dollars"

One of my older children has it stuck in his head that you make your purchasing decisions based on whether or not you HAVE money.

The only reason not to buy anything is because you don't have enough.
Buying something is a decision based purely on actually having the money.

He's heard this reasoning many times, over and over again from elsewhere. This mentality is proving very difficult to unlearn. We are teaching them, directly and indirectly, about budgetting, saving, and making decisions based on needs first. Conversations still emerge, almost daily:

"Kate, can we get McDonald's for dinner?"

"No, Thomas"

"Oh. We don't have enough money for McDonald's?"

"That's not it, Thomas"

"Well, why don't we get McDonald's then?"

I have never used "we don't have enough money for ______________" as an excuse. Perhaps I have said, "I don't want to spend my money on that" or "We need to save our money, we have other more important things to use it for right now".

Recently, I heard a radio DJ talking about credit increases on credit cards. "Just imagining what I could do with the extra money!" he was saying. He went on about this - never showing any signs of awareness that a credit increase isn't EXTRA MONEY. It's extra debt .. if you use it. No wonder kids are so confused.

One exercise we found to be pretty successful was sitting our oldest two kids down with a list of all the types of expenses our household must pay in a month and having them guess how much had to be spent on each. We then went through and gave them actual figures with an approximate "income" figure to cover everything. Not every family is comfortable sharing that information with their kids, but I'm glad we did as they appreciate how budgeting works a whole lot better.

What ideas do you have for teaching kids about money?


  1. Well said. It is very important to teach kids to have a healthy view of the dollar, and that credit is just that. It needs to be repaid. How much extra money you want to pay out is the question.

    And I agree with you about being rich. I wouldn't like that responsibility. To have money means you have to sacrifice something, whether you're born into it or earn it.

  2. Bank accounts. Using their own money to pay for things.

    We'll likely do some sort of course with them once they're in their teens. I'd like to do Dave Ramsey's Financial Peace University course with mine.