Teaching Kids the Value of Money

Money is something that is hard for adults to understand at times, especially working on budgets. That does not mean that we should not teach our children the value of money, how we earn it, save it, and buy something. Two years ago, I started to think about this topic and as we head back into the holiday season, think this topic is quite relevant.

The-Allowance-Game-Flickr-by-photophonic-300x225The holiday season is coming. With that, kids will start to make lists of items that they would like as presents. Budgets continue to be tight in a lot of households.  This made me think about teaching kids about the real value of money.

What does a penny, nickel, dime, quarter, or dollar really mean to a child?

To many elementary aged children, it may not mean much. They understand that items have prices. They see that we exchange money for services or goods. Still, do they understand what a dollar can really get them and how much time is needed to earn said money? The answer is most likely they do not. In school, teachers show children how to count currency. This is a great start, but real world lessons may work best.

My oldest son is now in fourth grade. When he was in kindergarten, we were planning our first family visit to Walt Disney World. TechyDad and I decided to try something. We did not want to do a traditional allowance system with NHL. Instead, we had goals for things that needed to be done. We rewarded him with specific coins to put away for Disney. Our theory was that he would have the money that he earned to spend on something he wanted, no questions asked. He quickly learned that his desires could not be obtained with the funding he had. NHL was proud of the Mickey Mouse wallet he bought and made a goal to earn more money for something larger next time.

When I was about NHL’s age, I know I received an allowance. I do not really recall what I did to earn my money. I believe it may have been taking care of my parakeets. What I do remember is learning to save money for items. I set goals for items that I really wanted. For over three years, I saved up for my own television. Then, I pooled money for my first Nintendo system.

Through real world experiences, NHL is slowly learning more about the value of money. We keep integrating new items into the mix. One of the possibilities is an allowance.

Does your child have an allowance? If they do, what types of chores do they do and how do you determine the proper amount to pay them?

I would love some input since many of us are probably curious about the same thing. I have to admit that I am not too sure about a traditional allowance. I tend to think that each family member has responsibilities that need to be done within the house. Still, I know having money to earn was a HUGE part of growing up for me.

It's Me

Disclosure: Parts of this post were previously published on a project I worked on. The text is mostly the same, but I placed a new introduction to go along with a topic that continues to be important.

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