Unusual Ways To Teach Kids About Money

It seems like there are a million different ways to teach kids about money. And of all the ideas available, Wall Street Journal personal finance writer Jonathan Clements often has some good, albeit unexpected thoughts:

  • “Let’s say you give your kids $5 a week in pocket money. When it’s next time to fork over their allowance, offer them a choice: They can have the usual $5 right away — or they can have $7, equal to a whopping 40% more, if they’re willing to wait a week.”
  • “Try varying the form of their pocket money. One week, give them five singles. The next week, give them a $5 bill. You will likely find your children are slower to spend the $5 bill.”

These ideas come from the same guy who suggests offering kids $1 to drink water instead of buying a soda with a meal, so we expect something a bit unusual from him. But the concepts seem valid and he claims they’ve had success. What sort of tips (unusual or not) have you found to be successful in teaching kids about handling money?

Making Kids Money Savvy: Try These Four Financial Tricks [Wall Street Journal]

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  1. stpauliegirl says:

    My dad once tried to teach me a lesson about lottery tickets. He owed me $2 for some chores I had done, so he offered me two crisp $1 bills or two $1 scratch-off lotto tickets. He was hoping I’d take the tickets and end up with no monies, but I took them and instead won $20. I’m still teasing him about it many years later.

  2. hi says:

    Mowing my neighbors yard as a kid and getting a shiney half dollar. Then showing it to my dad and he walked me back over to their house to return the money because we do things to be nice and not to make money. Worked for me. I am a better person for it.

  3. BlackestRose says:

    What age for what scheme? When my kids were 5 or so, I figured out a big ticket item they wanted and set a savings schedule with them. My son saved for a ferret and set money aside for it’s vet bils. My daughter saved for a console and various games.

    As they aged I gave them clothes budgets and got out of their way. (Granted, we did go a few semester short of socks and underwear, but that was a self correcting problem. The next time they budgeted better.)

  4. shan6 says:

    – or they can have $7, equal to a whopping 40% more, if they’re willing to wait a week.”

    On top of their 5 bucks? Or total? That dudes kids are getting ripped off…

  5. mattatwork says:

    When I was around 12 and starting to hang out with friends around town, my mother offered to reimburse me for any juice I bought to deter me from buying soda.

  6. UpsetPanda says:

    Offering kids $1 to drink water instead of soda? How about just saying no when they ask?

  7. BlondeGrlz says:

    My grandfather used to pay us for chores in $2 bills. I loved them so much I never spent them. Maybe if my employer paid me that way I’d have more savings.

  8. shan6 says:

    @UpsetPanda: Word.

  9. speedwell (propagandist and secular snarkist) says:

    I taught my 12-year-old nephew how to avoid getting ripped off on eBay one long afternoon when he had 30 dollars and was bitching that he couldn’t afford an MP3 player. By the time we were done, he had researched online prices from Amazon to Woot.com, understood misleading listings and why some things looked so cheap, learned how to figure shipping costs, set up his own PayPal account, and negotiated a final price with a Make Offer seller. When the MP3 player came, he was happy with it and with himself. My brother said he learned a few tips just from listening to us. LOL

  10. speedwell (propagandist and secular snarkist) says:

    @UpsetPanda: Because you’re trying to teach them the value of money, not turn them into wretched, deprived-feeling balls of rancor.

  11. smartmuffin says:

    @UpsetPanda:

    Consider it a way to prepare your kids for the future. You know, government programs where you get paid for good grades, not getting arrested, not using illegal drugs, getting vaccinations for your own children, and so forth.

  12. @UpsetPanda: I agree.
    My girlfriend is pretty sure that if we have kids they won’t drink soda because they will be too afraid too. I talk way too much about how bad HFCS is, and how it is ruining our country etc. etc.

    Bribe your kids to be healthy? How about just setting a good example. Don’t take your kids to fast food restaurants. Cook a healthy sustainable meal and have a nice family dinner. If there is no soda in the fridge, or none on the menu, they can’t ask for any.

  13. KarmaChameleon says:

    I liked Cliff Huxtable’s hilarious method of teaching Theo about money on the Cosby Show. So did my mom, actually. I was about six years old at the time, and she used that episode as a teaching opportunity. She pulled out the family Monopoly game and sat me down, using the money to explain stuff.

    I can honestly say it was the best crash course in handling money I’ve ever had.

  14. qwickone says:

    @blondegrlz: lol, brilliant!

  15. qwickone says:

    @suburbancowboy: thank you, that’s a MUCH better to teach them WHY they shouldnt drink soda instead of paying them not to.

  16. blacketj913 says:

    ” — or they can have $7, equal to a whopping 40% more, if they’re willing to wait a week.”

    so you are teaching them that you yourself are willing to pay high interest rates in order to delay payments…

  17. UpsetPanda says:

    @speedwell: Very, very clever on teaching the 12 year old how to navigate for bargains.

    I’m not sure paying $1 for water teaches the value of money – I think it teaches “I’ll pay you money if you do things that make me happy,” instead of instilling that soda is unhealthy and decisions to drink something healthy should be based on care for one’s own health, not because it’s more frugal.

    @suburbancowboy: I don’t think kids should be afraid to do anything – whether it’s drinking soda or tea or coffee. There’s a difference between “it’s not healthy for you” and “it’s going to kill you” which soda isn’t going to unless you chug it every hour of every day.

  18. Tzepish says:

    Generally I just cover my naked children in money. Oh wait, that’s a bad idea.

  19. Jim says:

    @qwickone: Agreed. I feel like the $1 for water teaches them to do stuff for money. It’s a slippery slope! Next thing you know your kid is the one who eats earthworms for quarters!

    Our son is not yet 2, so he can’t figure out interest and things like that yet, but he does recognize coins and promptly takes them to the converted peanut butter jar for deposit when he finds them.

  20. SaraAB87 says:

    My mother taught me VERY well but most things about online shopping I had to figure out on my own (of course I was 18 when the internet first became popular and I had some common sense so that was not hard to do).

    I would say the best thing ever would be to set up a savings account for your kid early on. Wait till they get a bit over the minimum balance amount from birthday and Xmas money and then set up the account for them. I have had a savings account since I was like 7 or 8. Its the best thing my parents ever did for me. Then every time they get money for a birthday or christmas or for other occasions make sure they put at least some of it in the savings account, this way they will be less tempted to spend it on faddish items that they will tire of quickly. Make sure you show them the monthly statements and explain them to the kids to show them how much money they are saving.

    Saving money is nice and everything but if your kid goes and spends everything they save then its kind of pointless because when they get older they will have no bank balance to fall back on. With the cost of college these days its never to early to start teaching your kids to be responsible about money.

    Healthy eating also helps kids to behave better (ever seen supersize me?) and if they behave better at home and in public they will ultimately be more responsible children, which means they will be be more responsible about money too. Healthy eating also saves money for the family as you don’t have to spend money on expensive junk foods. Fruits and vegetables are expensive but not as expensive as that 4$ bag of potato chips.

  21. Me. says:

    When I was very young, I used to bite my nails so short that they bled. If I let them grow enough that some white showed, I’d get a dime for each finger and a quarter for each thumb. It was effective enough to make me stop and I’ve never had an issue since.

    I don’t think we should discount the effectiveness of a little bribery with children.

  22. Me. says:

    Also, I think my friend’s parents were so smart when we all started driving: They got her a used car and paid her insurance to start. The catch was that, if she did anything to raise the premium, she would have to take over all the payments. If she wrecked the car, they weren’t getting her anything else. Needless to say, she never got tickets or caused accidents.

    Also, they made her pay for her own gas, which really reigned us all in. We lived about an hour away from both Santa Barbara & LA so the temptation to just take off all the time was definitely there…

  23. UpsetPanda says:

    @Me.: What if the accident wasn’t her fault? Still the same or did they cover that?

  24. Lea9017 says:

    @Me.:
    What nice parents. I had to buy my own car, pay the insurance, and buy all the gas.

    My grandmother gave me a savings account when I was six and from then on anything that wasn’t essential I had to save for it. I saved everything from bdays and xmas and bought a kayak when I was 16

  25. meeroom says:

    @KarmaChameleon:
    “You like you touch it you break it you buy it.. Now what can I do for you?”
    That episode of the Cosby show totally stuck with me. We need a new Cosby show!

  26. forgottenpassword says:

    Here’s an idea. How about living by example to teach your kids about money. That’s what MY parents did. They lived frugally within their means, didnt buy a lot of name brands (I would have killed for freekin cheetos instead of the “wise” brand knockoff!), didnt use credit cards & basically lived a simple life (WAY simpler compared to the insane “gotta have it all NOW” typical consumer attitude THESE days).

    And tell your kids that their friends are WRONG about wanting everything & getting everything from their parents (being spoiled).

  27. Sonnymooks says:

    I find some of this amusing. My parents concern for me as a kid was that I understood the value of money far to well.

    Yes, I was that kid, the guy who was cheap with his money, didn’t want to spend it, and wanted to make more of it…and didn’t want to do anything unless he got paid for it.

    To them, the money and being financially wise was easy, it was teaching me empathy and consideration that was hard.

    I was the kind of kid who wouldn’t try for the extra grades in class unless I thought I was going to get cash. Ticked my parents off for years.

  28. BlondeGrlz says:

    @KarmaChameleon: That episode is my mother’s favorite episode of any sitcom, ever. She couldn’t stop laughing and my 13 year old self couldn’t understand why it was so hilarious.

  29. cmdr.sass says:

    Is there a Youtube link for that Cosby episode by chance?

  30. quail says:

    We’re working on a project in our house right now. As a family we’re saving for a Disney vacation that’s 1 1/2 years away. To start the savings we pulled our 10 yr old into the middle of the program.

    We’ve set up envelopes. Money from recyclables goes into one. Money from weekly spare change goes into another. When we eat home instead of eating out we decide how much we saved and put that money into an envelope too. Etc. As the money grows I have him help me track it in Excel and we can see where the money came from that’s going for the trip. In the end I hope he understands that it’s the choices we make that determines how much savings we have.

  31. RumorsDaily says:

    I suspect the soda thing wasn’t about the healthiness of the soda, but rather the cost. He was teaching the kid to see that he’d be nearly as happy with a free cup of water as he would be with a two dollar cup of soda… the money was forcing him to consider what he was giving up in order to get the soda. Since the kid wasn’t paying for it directly, the dollar made the expense more tangible.

    Just a guess.

  32. groverexploder says:

    @forgottenpassword: Really? I discovered Wise later in life and FAR prefer them to Cheetos! And even now, I still like most of the bag cereals compared to the Kellogg or General Mills versions.

  33. Ghede says:

    @stpauliegirl: Heh. That is a lesson that backfired. He should have gotten you the mega-millions lottery stuff. If you won that…

  34. lbell says:

    @BlackestRose:
    You made your kids pay for their own underwear and socks? Talk about tough love…..

  35. Jon Karak says:

    I had a friend whose parents made him deposit 1/2 of all of his earnings into a savings account. He was allowed to spend the rest.

    Then at the age of 14, he was given the responsibility to manage the account himself.

  36. Smitherd says:

    @cmdr.sass: Ask and you shall receive.

  37. themidget says:

    @Me.: Me too, but with cussing and seat belts. I paid the parents a quarter if I cussed, but if I caught them, I received 50 cents (they explained that the difference in penalty was not because they had more money, which obviously they did, but that as adults they should have more control.) Same with seat belts, except I think that was 50 cents and a dollar because it was more important. And before anyone thinks my parents were carousing around sans seat belt on their kiddos, cursing like sailors, I was well past 18 the first of like four occasions I have heard my mom use the F-bomb, and seat belts were not that commonly used when I was little.

  38. bairdwallace says:

    @hi: What’s it like living in a homeless shelter?

  39. BlackestRose says:

    lbell

    Sorry it took so much time to get back to you. We gave the kids a cloths budget they had complete control over. So the burden of paying for undies and socks didn’t come out of their allowance. They just had control over it.

  40. jonny0204 says:

    @blacketj913: next he’ll be teaching them how to avoid debt collectors, as i gather this guy actually wants to save his kid’s cash.