Shannon Ryan joined us to kick off the new Stacking Benjamins podcast yesterday, and we received a ton of great feedback and requests to “get this in writing.” So, we owe a big thank you to Shannon, who sent over her tips for us. If you missed the podcast, here are some great tips to help kids learn about money. Enjoy!
Summer is the perfect time to start talking to your kids about money as life is less structured, and you have more time to slow down and have these important conversations. And don’t worry–money conversations do not have to be boring! Position them correctly and you can have fun while teaching your kids good, life-long money habits.
1. Set Clear Goals and Make It Fun
Over a favorite family meal, we discuss how we’re going to use our family money in three areas – what will Save our money for; what will Spend our money on; and who will we Share our money with? If your children are older than 6, have them create their own summertime money goals. For example; Save–for a new bike; Spend–during a trip to the ice cream store; Share–with a local charity, such as the humane society where you can deliver your donation in person. Once your kids have their goals, help them find fun ways to earn money. For example, post jobs in the house, a lemonade stand, etc.
Fun Activity: Make goal-setting a fun event and your kids will no longer dread the word “goals”. Celebrate achievements and create friendly, sibling competitions on who can reach their goals first.
2. Slow Down and Have Regular Money Conversations
Some of my best money conversations with the girls happen during our normal activities. For example, take your kids shopping. Have them help you prepare the shopping list to create a clear understanding on what the family “needs” are and where “wants” fit in. At the store, be sure to talk through your purchases with your kids instead of making internal comparisons. For example, why you buy a name
brand vs a store brand for one item and not another.
Activity Idea: See how much money you can save on groceries for the summer. Make a list of needed items and search for coupons and specials. Use the money saved for something fun.
3. Make Your Goals Visual
Post family and individual goals where everyone can see them. You can cut out pictures from magazines or print pictures from the internet to create a vision board for your goals. Set up jars or envelopes for their Save, Spend and Share goals. When they earn money, discuss with them how they want to allocate their money towards their goals.
Activity Idea: Have you kids decorate their jars or envelopes with images of the things they plan to save, spend and share their money on or with.
4. Post Jobs so the Kids Learn How to Earn Money
I am not a believer in allowance, but I do believe you need to find a way to put money in your kids hands, so they can learn to make decisions around it. Each week create a job posting that consists of various chores that are important to running the house, but outside the children’s expected responsibilities (in our house, this includes–making beds, cleaning dishes and cleaning up after themselves).
Fun Activity: Weekly job postings allow kids to pick and choose which jobs they want to do. Plus, they can choose whether to do a lot (and earn a lot) or do little (and earn little). We treat this like a real job and on pay day, if they haven’t done their work to my satisfaction, they may not get paid. Or if they have gone above what the job entailed, they could earn bonus.
5. Let Them Flex Their Decision-Making Muscles!
We all have a finite amount of money, so the earlier you can teach your children to make wise choices with their money–the better! One of the best ways to teach them is to involve them in the decision-making process. You want them to figure out what makes them truly happy, rather
than listening to what others tell them they need. Once they master this, they will spend their money on the things they want and learn to create joy with any amount of money.
Fun Activity: Create an entertainment budget. Give your kids multiple options, some expensive and some not, then let them figure out how to use the money.
Photo: Mosieur J.
Shannon Ryan, CFP® is a Mom on a mission to help busy parents teach their kids simple, value-based principles that guide their money decisions and support their long-term financial well-being. Shannon wrote The Heavy Purse to help parents start money conversations with their children through a fun, bedtime story and developed companion workbooks to help deepen those conversations. Visit www.TheHeavyPurse.com to learn more on how to raise Money Smart Kids.
Pauline says
Start a lemonade stand! When I was a kid we sew bracelets during summer and would sell them on a small stand in a busy street. It was ridiculous money for the time and effort but we learned the value of a dollar.
Shannon @ The Heavy Purse says
That’s exactly what my girls do! They sell lemonade in the summer and my next book is actually called The Lemonade Stand! Too funny! I think it’s so important for kids to earn money and feel that pride of getting paid for their hard work.
Adam @ Money Rebound says
When I was young I was always trying to earn money one way or another. I think it’s a great idea to set those kind of money earning chores for the kids, as long as they’re realistic. My Dad used to set us some ridiculous tasks for very little reward, I ended up washing the neighbours car instead. 🙂
Average Joe says
That’s sad! It seems like your dad could have found a way to spur your entrepreneurial spirit AND have his car washed instead!
Mike@WeOnlyDoThisOnce says
Every summer job, at that stage, is educational–no matter how physical or menial. Great lessons.
Average Joe says
I agree that it SHOULD be educational…but some kids seem to never learn the lesson. I think as parents we can help them see the lessons behind rotten work.
Thomas @ Your Daily Finance says
I have to agree with the allowance. Im not for just giving kids money and they did nothing. Never thought however about the putting of chores and listing them so that they know what they can do and for what. The decision making process it key and they need to start learning.
Average Joe says
I absolutely love that one, too. She does a great job of describing it on yesterday’s podcast, too!
Mike says
I love the idea about posting jobs for your kids to apply for! What an excellent, original idea to teach kids about the value of work and earning money! Great article.
Shannon @ The Heavy Purse says
Thanks, Mike! It’s definitely worked well in my family. The best part is now when the girls see things they want in the store, they no longer turn to me and ask me to buy it for them, but want more ways to earn money. I love it!
DC @ Young Adult Money says
I definitely like the idea of a “job posting” each week. I think that would really help kids learn about the value of money and the fact that it is “earned” and doesn’t grow on trees!
Shannon @ The Heavy Purse says
Thanks, DC! That’s exactly why I don’t like allowance. When you’re adult no one just hands you money – you have to earn it!
Kim@Eyesonthedollar says
Great tips, Shannon, as usual. I think I’m going to start charging my daughter for leaving the lights on. She never used to do that, but the past couple of months, she needs every light in the house on and forgets to turn them off. I feel like I spend half my time turning off lights. Please tell me this is a phase that will be outgrown!
Shannon @ The Heavy Purse says
Thanks, Kim! My daughters weren’t always the best at turning things off either. So I started showing them the utility bill, particularly the chart showing our usage. We made it a game to see if we could make it lower and it definitely helped them remember to turn things off when they weren’t using them. Hope that helps!
Anita says
I love these ideas! I am definitely going to share this post. I believe children need to start learning these things early.
Shannon @ The Heavy Purse says
Thank you, Anita! I agree and the earlier you start, the easier it is for them to adapt. My girls have been doing these things for years and it’s second nature to them.
Laurie @thefrugalfarmer says
Awesome post, Shannon and Joe! Love the idea about job posting. We use allowance in a different way: as a bi-weekly paycheck for a specific chore list, similar to how it works at a regular job. We explain to the kids that if daddy, for instance, were to not show up at his job or not do his work, he would not receive the paycheck that pays our bills every month. We even pay them on the same day that Rick gets paid. It works well for us this way, as they learn to understand the work-equals-pay concept and also the delayed gratification, i.e. the fact that in a real job, you don’t get paid immediately for the work. But there are also some chores that they do here that they are required to do simply because they’re a part of the family.
Anthony @ Thrifty Dad says
Great post! My friend and I did the lemonade stand thing, back when we were about 11. His uncle helped us build the best lemonade stand ever! I remember we had some cute girls come by for a drink and we couldn’t possibly charge them more than a dime haha… so our goals quickly changed – we were losing money fast and had to close up shop. 🙂 Aside from the lemonade stand business these are all great fun ideas. I love the decorating jars with the images of what they plan to save on and the job postings idea. They’re so simple! I’ll have to remember these with my little one.
Herbert says
I loved this blog. It’s so right to teach kids the value of money at a young age. I’ve seen my sister teach her kids how to save from their pocket money and it just amazes me, when the lill one buy’s me a gift from the saved account.