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Q: How do you teach your kids about money?
Betsy says; This year my kids finally turned old enough to really understand the power of money. So I decided to give them an allowance. They work for it, they earn it and it’s a pretty decent amount, because, you see, I no longer buy them anything… I mean anything beyond food and the essentials, like room and board basically. Beyond that, if they want it they pay for it. I don’t buy toys or gifts beyond birthdays and Christmas. They pay for their school supplies, clothes, even part of our family vacation. It may sound harsh, but the response has been amazing. They’ve finally stopped harassing me in the store for stuff, they are actually becoming quite frugal! I’ve even gone so far as to stop buying their favorite snacks, hey if it’s beyond the healthy meals, they buy it. It’s worked well for me and they’ve begun to understand the power of money, the idea of saving for what they want and that often what they want isn’t all the necessary, especially when they see the price tag. Less is becoming more in my house, and I like it that way!
How do you teach your kids about money?
Response from John Ross a meaningful Dad:
For me, if I have to use baby talk or baby pictures to explain it to them, then I am starting too young. For me, the child needs to not only be old enough, but mature enough to understand what a bill is, why we get them, and why we must pay them. They also need to be able to understand what budgeting and savings mean. When I teach a child about money, they need to be able to “use” what I teach them, in “real life”. They cannot use play money. They cannot use toys and fake this or fake that. All of that is for play time (for most, not all). Teaching a child about money, one needs to be realistic about it, and to be realistic about it, the child needs to be age appropriate and mature enough to understand the reality of money in the real world. A child running a lemonade stand is learning about money in the “real world”. They received money to purchase supplies, so they know where that money came from, how it was spent, and what they got for it in exchange. They now know that, that money is gone, but they have something in its place. They made lemonade and sold it, and in return, they received money. Later, they spent that “earned profit” on something else. To me, for “some” kids, this “reality” cannot be achieved with “fake money” because some kids have trouble transferring the fake lesson into reality. For some kids, they know the “fake money” has no value, and may take that concept to reality, which causes them to miss the point on learning about money in the real world. They won’t place the appropriate “value” on money.
Since I’m trying to keep this short, the child needs to be old enough and, mature enough, to understand the “reality” of what you are trying to teach them. Just to clarify, there are many kids who can be taught using fake money, but not all, and the person doing the teaching, needs to be able to make that distinction. They need to be able to “know” whether that child is capable of transferring the makeshift examples into reality. If they cannot, then it is best to wait until that child reaches the maturity level before trying to teach them about money