It seems that kids today find it increasingly harder to understand the value of money. It’s no longer like it was ten, twenty, or even thirty years ago. Today’s world is filled with micro transactions where even downloadable songs are anywhere from a dollar to a few dollars each on places like iTunes. The old saying, “Money doesn’t grow on trees” no longer illustrates to most children how hard it is to actually earn and save money.
In order for children to learn what the real value of money is there’s a few fun ways that you can teach them. Just remember that the more fun you make it for kids to learn, the more eager they will be to retain the lesson at hand.
Start an allowance jar – It doesn’t matter if you pay in pennies, nickels, dimes, or quarters. You can also pay in dollar bills, but that’s only advisable for children past the age of twelve or so. Make sure to divide each jar up into “Spend”, “Save” and “Share” and label them as such.
Pay based on what your child accomplishes – Make an allowance based on your child doing chores, getting high grades on a test, and anything else you can think of as positive reinforcement. Depending on your child’s age, use a sheet with stickers and pay a coin for each accomplishment at the end of the week or month. Children love to receive stickers because it gives them a sense of tangible achievement, and being able to cash them in for money makes it even better.
Require one sticker’s worth of saved, shared, and spent – Make your child put a coin or dollar bill in at least each jar per week. If your child wants to save up for something more costly, tell them to put the remainder of their earnings into that jar. This will come in handy later when you’re teaching skills like price comparison and even the idea of wages.
Have your child start a micro business – It doesn’t matter whether it’s starting a lemonade stand, offering to mow the neighbor’s lawn, or just watering an elderly neighbor’s flowers. This is a great way for a child to learn what the value of a dollar is based on their time, and it’s a great way to make the transition from allowance to actual earned income. It’s also a great way to teach children that they need to make more money in order to get something more expensive sometimes.
Do price comparison with your child in the store – You will be surprised how quickly your child notices the difference between one toy and the next when you do price comparison, even if it’s just a few pennies. The grocery store is also a great place to try this out. Show them how much money you were able to save in the end by comparison shopping and also using coupons.
Lauralynn Schueckler is the Online Marketing Specialist at Advantage Credit Counseling Service. She is the author for Advantage CCS’s Blog called Dollars & Sense. Advantage Credit Counseling Service is a member of the National Foundation for Credit Counseling. Contact Advantage Credit Counseling at 866.699.2227, or visit them online at www.advantageccs.org.
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.