Teaching Children About Money

The Math and the Responsibility

When it comes to teaching my son about money, both the math side and the responsible spending side, it seems logical to me that the only way he’ll learn is to use real money. And learning how to count money is very motivating when you are counting your own money!

Teaching Math with Real Money

For math, we’ve done a variety of things. As I mentioned in my 1st grade math post, I have used some workbooks to teach math, and in the past, I’ve used storybooks and even my own stories to teach about math too. (This is something I will continue to do!) For teaching about money & coins, I’ve also done the following:

  • When my son was first learning his coins, I pulled out a piggy bank of loose change, and we sorted them into piles and rolled them into paper wraps.
  • We also have a fantastic little toy cash register. It comes with pretend money, but we can also use real money with it! The boys love playing “store.”
  • For a Christmas present one year, my brother’s family gathered “Coins of America” collectible quarters and sent them to my boys with some storage folders. The boys had a lot of fun putting the quarters into the folder and learning about each state in the process! (A good geography lesson too.)

Teaching Financial Responsibility

To begin the long process of teaching my sons about financial responsibility, the first thing my husband and I have done has been to talk honestly and straightforward about money. We let them know how much things cost. We let them know our house, our cars and food all cost money, and that’s why we have to work.  A great byproduct of homeschooling is that because the boys are home all day, they see firsthand what it takes to care for a home, and they go shopping with us too.  We discuss what we can and cannot afford to buy, and we talk about how we sacrifice some things in order for me to stay home with them full-time and homeschool.

Note: We don’t pound this into their heads. It’s simply a matter of mentioning it once in a while when a question or issue comes up.

Second, I have a little pouch for each of my boys with their names on it. Whenever they are given a little birthday or Christmas cash, they keep the money in the pouch, and they are allowed to spend it on what they want. (My four-year-old doesn’t understand this as well as his big brother.) My only rule is that once they see something they want, they wait one week to buy it. (I thank Lori Pickert for giving me this idea.)

I was afraid that when I began doing this, my seven-year-old would want the first toy he saw in every store. (He was six when I started this.) But he has impressed me by not doing that. He spends his money, and he hasn’t saved much, but he’s thoughtful about his purchases, and he doesn’t want “just anything.” He doesn’t spend all his money in one place. He’s always willing to wait a week too. So far, he has not changed his mind during that week, but I do think over time, it will teach him how not to be an impulsive shopper…. He’ll understand that the product will still be there, if he wants to wait a while.

I’m also hoping that over time, he’ll begin to see a pattern like this: I really wanted that horseshoe crab when I bought it, but now I rarely play with it. (This is something I plan on pointing out to him on occasion too.)  I’m also starting a spreadsheet that will show how they spent their money, and how much they would have had, if they had saved it.

I think having freedom to make his own decisions with his own money is important, and except for asking him to wait, we’ve let him decide what to do with it.

With a few exceptions, we do not buy him toys other than on Christmas and his birthday. Since he has his own money, we let him buy something, if he wants it.

I should also note that we do not give allowances. Housework is something everybody is expected to do. To earn money, however, I have told the boys that they can do extra work that is beyond our regular cleaning routine. For example, I’ve told them they can help clean the walls and base boards for money, and they have done this on occasion….not very well, but that’s not the point to me. (I might give them $1-2 for this, depending on the amount of effort expended.)

Only time will tell if this teaches them to be responsible with their money, but I think it will help. Ultimately, I think children learn from their parent’s behavior regarding money, and if the parents are responsible, the children probably will be too. Modeling good behavior, conversation and real-world experience go hand in hand.

Please share your advice for teaching kids about money in the comments section!

6 thoughts on “Teaching Children About Money

  1. i’m glad the one-week rule is working for you! 🙂

    i like reading about how different people handle allowances/spending money. we also keep pocket money completely separate from helping out around the house. it seems to be the way to go if you don’t want to be constantly arguing!

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    1. Thanks, Lori! The one-week rule has been so helpful. It probably helps me more than it does him. Because I would feel funny if as soon as he told me what he wanted to buy, I’d say, “Okay, let’s go get it!” Being able to say, “Okay, well, if you still want it a week from now, we’ll look for it.” It just feels less impulsive to me too.

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  2. Thanks for this, Shelli.

    “Housework us something everybody is expected to do.” Yes, it’s the same in our house. And like you, we do offer extra little opportunities above and beyond the usual chores. For example, if the 11yo has her eye on something she wants to buy or if she has a money-spending opportunity coming up she will offer to clean out the car & vacuum it.

    I’m also trying to teach her negotiation skills. In my family culture negotiation is important, so it’s something that we talk about when it comes to money. British people tend to find negotiation intimidating, perhaps suspecting that there’s foul play involved (“just tell me the price!”). But negotiating over money matters is an important global skill, IMHO.

    Lisa

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    1. Thank you for your comment, Lisa. Teaching negotiation skills over money is very interesting and something I’ve never thought about. I would love it if you could explain how you do it a little more and talk about what situations might arise when your daughter might need them? I can see they may be a global skill. I know when I was in India, I could have used better negotiation skills with those darn rickshaw drivers! LOL I suppose it’s a matter of being assertive and not scared to state your price? But also being aware of what a fair price is in any given situation.

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