Teaching Children About the Value of Money

Teaching kids the value of money

Teaching kids the value of money and watching their savings grow.

Last week, my 4-year-old had a dramatic meltdown in the car over a pair of light-up shoes that she “really, really wants”, but let’s be honest, really doesn’t need.

Cue my attempt to discuss with an inconsolable child – while driving – the difference between wants and needs, how I earn money, and why $30 light-up shoes are not at the top of my spending list right now.

Yeah, it went about as well as you might imagine.

Like potty training and sleeping, I had kind of hoped that the concept of money could be picked up by instinct or observation by my children. In reality, these things all seem to require a conscious effort, so ever since they stopped putting coins into their little mouths, I’ve tried to teach my kids the basics of money.

Inspired by parenting guru Barbara Coloroso, I’m adapting her philosophy of “save, spend and give away”: coaching young kids to thoughtfully save some money for big things down the road, spend a little as they wish, and give to charity.

In our house, this translates into a modest monthly allowance for each kid, with opportunities to earn more money with chores from the “odd-job jar”. We discuss how much of this money they want in their piggy banks, how much in their wallets, and every once in a while, what good causes to support.

For the most part, this actually seems to be working. My kids will sort out together how much they can afford to spend at school bake sales or neighbourhood garage sales based on the change in their wallets. They also managed to save enough in their piggy banks over the year to pay for souvenirs of their choosing during our recent summer holidays.

They even readily agreed to split the cost of the Minecraft software they wanted on our home computer with their Dad and me last year, by earning $5 each with extra chores around the house. And they are developing a touching sense of charitable giving: sometimes it’s just a few quarters being dropped into the donation box at a store checkout, but they have also collected money for food banks and animal shelters in lieu of presents at their birthday parties.

Not that we don’t still have our work cut out for us.

My 9-year-old thought spending $4.50 on vending machines at the pool last weekend from her $5 in savings was “a good deal”, and my son wants to spend his next allowance at the gumball machine at the mall. And of course, there are those darn light-up shoes.

But I’m hoping that a healthy debate about the value of money when they are this young is good practice for the teen years when the stakes – and costs – are higher.

Indeed, my oldest is starting to ask about bank accounts and credit cards, and plans to save up to buy her own iPod. With those kinds of decisions on the horizon, I’m grateful for every month I can still get by dolling out allowance from the few quarters and loonies I find under couch cushions and on the floor of the car – and calling it a successful lesson on the value of money.

Carmen Kinniburgh

Carmen Kinniburgh is a freelance writer and editor exploring topics and ideas about parenting and families, Canadian science and research, health and medicine, as well as travel and lifestyle. Born and raised in Alberta, Carmen has also lived in Southern Ontario and Manitoba, where she worked in professional communications for a university and a national health charity. Currently living in Thunder Bay, Ontario, she gets all her best ideas and insights for Parentwise from her own three delightfully precocious children.

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