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Kids & Money

I was not raised counting my pennies. I was an only child and only grandchild on my mom’s side until I was 11. I was spoiled! Not like a bratty little rotten kid, but I was used to getting whatever my little heart desired. While I did have lots of fun toys and experiences I am thankful for, when I grew up, I realized really quickly that I just had no idea what I was doing when it came to money. Through trial and error, I’m in a completely different state of mind now!

While reading Parenting With Love And Logic a couple of years ago, I came across a story about a mom who had repossessed her child’s CD player. I was aghast. What kind of parent would confiscate their child’s toy!? How cruel!!! Over time, I realized that mom was doing a better service to her children than I was doing to my son. Handing everything over to my little man didn’t teach him the value of money, work ethic, or how to budget. It taught him to be spoiled just like his mama. As my husband and I became Dave Ramsey junkies, I realized that not only did we need to be debt free, we had to teach our children young (as in right this second!!) how to be responsible with their finances. As in Love and Logic, if they are given tasks to make mistakes in at a young age, they will learn their lesson before the stakes are huge.

During this series, we’ll talk about teaching your kids about money, about budgeting, and how they can save money with coupons. I look forward to your feedback on your own experiences growing up plus what you do with your own kids.

Prepare Yourself

First, set a good example. You cannot expect your kids to stay away from debt and credit cards if they are watching you pay with your credit cards constantly. Think about what values you want your kids to learn and then align your behavior with those goals! Explain what you are doing when writing checks, withdrawing money at the ATM and paying for groceries. They will learn by the process of osmosis so share with them!

Second, no matter how you teach, make learning fun for them! There are board games, online games, and homemade tools that can help illustrate your lesson.

Third, and this is a hard one – allow them to make mistakes. Just like the Love And Logic mom that repossessed her child’s CD player for failure to pay his loan from her, you have to let them learn while the consequences are small or they will never learn. If you are constantly bailing them out, all your lessons will be moot. Does it stink to see them fail or make a bad choice? Yes. However, I would much rather watch my boys make mistakes at young ages where there is safety and no permanent consequences than for them to be in credit card debt with a repossessed car at the age of 20.

Fourth, remember that a single method will not work for everyone. You may need to use multiple methods in your household based on your children’s ages and personalities. As with many other things what works for one child will not work for another. You may need to tweak your “plan of attack” mid-way. This was true with us. I was determined to use sticker charts when we first started working with Jorryn. As time went on, I realized it simply wasn’t working for us. Stay flexible and re-evaluate how your method is working. You want it to be simple for them to understand, engaging for them and easy for you to teach!

The Basics

Depending on the age and knowledge of your kids, you’ll want to start with what money is and the amounts each coin or dollar represents. If your children are very young, a basic explanation that you earn money for a job well-done and then use the money to purchase needed items will suffice. If your kids are older and already have a basic grasp of money, a history lesson might be fun to share with them how money has been used throughout history. Looking at an old coin collection might also be interesting to show them. With Jorryn if I can show him something interesting right off the bat, he’ll be much more likely to be interested in the rest of my point! For young kids, play money can be great to work with since it’s not dirty! I used to work in a bank, and let me tell you: money is GROSS! So, I think it would be a good idea for them to see real money, but for teaching them denominations, etc. I think play money would be ideal. Another great tool for younger kids would be a chart to re-enforce what you’ve discussed. I really like this money placemat or this money chart which will help keep the lesson in their minds without you trying to drill it into them!

Once you have worked on denominations, you’ll want to touch on what these terms mean. Again, depending on your child’s age your detail will vary!

  • Income: money earned for goods or services. (employment, job, paycheck)
  • Expense: money spent on goods or services.  (outgoing, bills, debt)
  • Budget: a list of income and expenses.
  • Debt: owing money to someone else, usually for a charge.
  • Interest: a rate (amount) charged or paid for the use of money. (It could be money earned on money in a savings account or it could be money spent on a debt such as a credit card or mortgage.)
  • Inflation: the increase of prices over time.
  • Discount: a reduced price.
  • Savings: money that is not spent, but kept some place safe such as a bank or piggy bank.
  • Charity/Tithe: a portion of income that is donated to a charity or church. Usually 10% of the income.
  • Bonus: extra money that can be earned for accomplishing additional tasks.

Have you discussed money with your kids yet? What kind of questions did they have? How much detail did you go into with them?

Jorryn’s Budget

Please remember that every family is different so different methods may work for you and yours! Keep an open mind and test out what works for your family’s life and your child’s personality, age, and learning style! This is what we do with Jorryn.

I think I have tried about 100 charts with Jorryn to help motivate him. In the end, it just wasn’t working and for whatever reason, I had a really hard time remembering to fill out those stinking charts every night! We have done away with the chart method for the most part. I do have a “reminder” list for him since I work hard to not nag him about every little thing and have him work on it himself. This is what our reminder list looks like:

Next, we set up envelopes for Jorryn. He has Share, Spend, and Save. His “income” is $20 which is paid on the 1st. I give it to him in $1 bills and it is split between the three envelopes. He puts $6 in each envelope and then chooses what to do with the remaining $2. When he receives gift money for his birthday or Christmas, he is allowed to determine what he’d like to do with that money. He also is able to earn a bonus for being extra helpful. I never announce “I am paying you a $1 for this job” ahead of time but at times when he is especially helpful or does something extra around the house without being asked, I will award him a little something extra and I make sure to explain exactly what type of positive behavior led to the extra cash. (Jorryn needs lots of positive reinforcements!) This bonus money is also his to determine what to do with. Finally, we have weekly goals that go on the fridge. They sometimes take him longer than a week to master but upon completion, he receives a $1 bonus (also up to him what to do with it) and a sticker on the card and then a new one starts. This is what they look like:

For his Save envelope, we discuss what he would like to save up to and then find a picture online. The picture goes in the envelope with his money along with the written dollar amount on the picture. At the time of goal setting, we also discuss how long that item will take to save for. We have also started discussing extra ways to earn extra money to get to that goal faster. Here’s what he’s currently saving for:

For his Share envelope, he can choose to take it to church as his tithe or he can choose another charity. He makes that choice for himself each month.

For his Spend envelope, when they money is gone, the money is gone! There are no loans from Mom & Dad! That may seem harsh to some, but it’s reality. If you aren’t going to use credit cards as an adult, then a parent covering extra money for a child doesn’t teach them the lesson. They will always expect that someone will cover their extras. Better to learn now and not set your kids up for a lifetime of debt! Here are Jorryn’s envelopes:

When setting up Jorryn’s budget, we agreed exactly what Mom & Dad covered and what Jorryn covered. We also agreed that Jorryn’s “income” comes from being an active member of the family. This means helping with dishes, helping set the table, helping take care of trash and laundry, keeping his room picked up, plus having a good attitude. We agreed that parents pay for needed clothes, meals, friend and family gifts, school supplies, and his sport fees. Jorryn covers any extra clothes or toys and hot lunch at school. This money comes out of his free spending envelope unless he chooses to save up for an extra special shirt or toy. We have had an extra challenging time with him cleaning his room. For example, in the morning I will let him know that he can choose when he wants to clean during the day but that his room must be picked up by X time. I also let him know that if it isn’t done by that time, I would be happy to clean it for him for a $1 fee which comes from his Spend envelope. Unbeknownst to him, I put the $1 in a savings account for him but all he knows is that $1 is no longer free for him to spend. We have had a few times where I got paid to clean, but once his monthly amount was dwindling, it certainly made him re-think paying mama for the job! The first couple of months of his envelopes, the first time we went to the store that month, all his money was gone and the very beginning of the month. Now he has worked a little harder at saving money to use throughout the month! This is what our budget looks like – we have all signed it as well 🙂

A final note on loans: there is one time I will allow a loan to happen. When Jorryn is out of spending money and his chooses to say a bad word or have me clean his room, I will charge him interest on his $1 and he has to pay me back on the following months spending money. This was one of the hardest decisions for me to stick with. It seemed so cruel. But, I would rather his mistakes be made and lessons learned now while he is young and the consequences are small than for him to grow and learn the lessons with big consequences.

This is what works for our family right now. This may certainly change in the future. What we do for Jorryn might be completely different for Zane once he starts. Only time will tell! I also expect that as Jorryn gets older, his budget items will change as I will expect him to cover some additional expenses for himself.

Your Budget

  • First, I would highly encourage you to check out Dave Ramsey’s Junior Discovers Series. The stories are funny and engaging and teach VERY practical lessons along the way. Jorryn loves them and we read them over and over.
  • Second, I also recommend Dave Ramsey’s Financial Peace Jr. which has great tools to make it very easy to get your kids started on a lifelong journey of financial freedom. Plus kids think it’s cool! 🙂
  • Decide your kids “income”. How much will it be? Will it be paid weekly or monthly? I chose monthly because it was easier to remember. What will they do to earn this income? Will you have any type of bonus system?
  • Decide how to determine what your kids have earned. Will you use a chore chart? How often will you check in? Daily or weekly?
  • Start your envelopes!! You should have a Share, Spend and Save! For young kids, it’s easy to say they earn $3 a week and put a $1 in each envelope. If you choose not to use envelopes, use three piggy banks or canisters. There is also this Money Savvy Pig that could work!
  • Make the Save goal. Discuss what this goal will be and how long it will take them to obtain it. We print out a picture and write down the amount and then put that picture in Jorryn’s Save envelope. If the Save goal changes mid-way through saving for it, get together and discuss. I feel it’s important for them to stick their goal so they learn the value of saving and working towards something. If the Save goal changes, I think they need to have a really good reason!
  • Determine what items will go in their budget. What will they be responsible for and what will you pay for? Put it in writing just like an adult budget! We all sign ours!
  • Confirm what they will do with birthday and Christmas money. Can they choose what to do with it or will you require a set percentage to go to Save or Share? Make a plan ahead of time!
  • Some parents like to match the amount their kids put into savings. Some requirements on this would be that they leave it in the savings account or do specific extra tasks to earn the savings matching. This could be a real motivator if they have a big Save goal they’re working towards!
  • Gift cards can be a great management tool. Some families ask for gift cards for Christmas or birthday so that kids can learn they can choose whatever they want up to that set amount.
  • Teach your kids that little things add up! Not only does every penny saved count to their goal, the price of small items adds up. For awhile we had a hard time with Jorryn not finishing a treat that was purchased. For example, he’d want a smoothie when we went to the coffee shop but he would only take a few sips and the rest would be thrown away. If this is a problem in your family, consider explaing how much the treat costs and tell your child that they will be responsible to pay you back for any “leftovers”. So if the smoothie costs $4 and 3/4 of it is left, charge them $3. Harsh? I bet you won’t have many leftovers after very long! It will make them stop to consider if they really want it or if they’ll really finish it.
  • For kids that are a little older, the Bank of Mom & Dad can be a great way to teach some real world skills! This pretend checkbook could be great to get started or you could create your own. Work on how to write a check, make out deposit slips, balance your checkbook register, use a debit card, and how interest on a savings account or loan works. You would be AMAZED how many adults don’t know this. When I worked for a bank, I was dumbfounded by people who actually called and said they still had checks left in their book, how come there was no money in their account. Prevent this! Some families have also set up pretend budgets for their kids and had them work off that budget like an adult would. For example, you would give them $2,000 a month to work with and have them “pay” for the mortgage, groceries, and other bills.
  • Teach your older kids about taxes. In Michigan, the sales tax is 6% so Jorryn has been learning lately that when we got to the store, he must also factor in tax for his purchases.
  • Open a savings account at the bank for your child and teach them about interest.

What method do you use in your family? What tips have you found work best with your kids?

Coupons with Kids

We all can agree how amazing coupons are at stretching our dollars. I feel that the lessons coupons teach kids stretch beyond just dollar and cents though! We’ve worked on managing money – now it’s time to SAVE it! 🙂 Here are the lessons we’ve learned in our family from coupons:

  • Be flexible & appreciative. Instead of assuming that our shelves will be filled in the favorite brand of each item, Jorryn has learned to enjoy lots of new brands and flavors. We have a notebook that he jots down requests in for the future but now we plan our menus around the sales/coupons instead of the favorites. (That’s not to say that there aren’t LOTS of yummy things to eat in our house – we just think of menu planning differently now!)
  • Always give back. When you are watching for deals, think beyond yourself and think about items that will help others or fulfill a need in our community.
  • Be considerate. Always be polite, use your manners, and never clear a shelf! We’ve also found joy in being coupon fairies by leaving coupons on the shelf or giving them to someone.
  • Be organized. Jorryn sees the power of my planning throughout my coupon binders, my weekly family menu, and my shopping lists.
  • Hard work always pays off. Does it take time to clip coupons, plan a list and shop? Yes – but the reward is worth it!
  • Start saving! Jorryn has seen first hand the power of all the pieces coming together in saving us money. We’ve included him as we’ve paid off our debts and as we work towards saving as a family.

Coupons save money, pure and simple. But how can you impart this knowledge to your children in a practical, hands-on way? There are lots of ways!

  • With very young kids, the Sunday paper can be a tool to teach colors, numbers, basic math, and time (expiration dates).
  • Have your kids practice cutting and then help out on Sundays! Clipping coupons is a family affair in our home. For a few weeks, I gave Jorryn some dud sheets to practice on, such as cutting out an ad and then we moved onto coupons. I only let him do one sheet at a time, but he takes his little pile and clips away. Throw on some music or a movie and relax together while getting something done!
  • Work on sorting and categorizing skills by having your kids sort their clipped coupons into piles according to type or category.
  • Make math fun while playing store. Have your kids work on their math skills while picking items, checking out, and using their coupons to drop the total. You can also introduce the concept of doubles or triples to have even more math lessons. You can also work on sizes – have them figure out what’s the best deal for each product! You’ll probably want your little kids to use some expired coupons to play with!
  • Let your kids read your list. If your kids are shopping with you, get them involved by helping search for items you need as you go aisle by aisle. If they’re too young to read the list, have them try to match the coupon pictures with the items they see.
  • Let your kids “pay”. While in the check out lane, give your kids the money and coupons and have them help check out.
  • Give your kids their own coupons. Jorryn chooses some coupons to put in his own small accordion style keeper. He then “helps” me by finding deals when I plan my menu and list!
  • Allow older kids to plan a meal. They can handle it from start to finish by choosing the food and using your stockpile, sales and coupons. See how creative they can be! Challenge them by giving them a dollar amount they must stay under.
  • You don’t need to stop with meal planning! Have older kids help plan the entire shopping trip! Some families offer a reward by giving their kids a percentage of the savings as a motivation to do the very best.
  • Think outside of the grocery store. Have your kids help plan and save for vacations. If you’re going out to eat, talk about ways you can cut down your bill or look for coupons to a restaurant before you leave the house.

How do your kids help with coupons in your family? Were you raised in a coupon family too?



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