Kids and Money

I remember when I was a kid, my parents would take the time to show me how money worked. (This was in the days before ATM’s and online banking.) My mom would show me how to write a check out to “cash,” hand it to the teller, and get cash in return. She showed me how she deposited Dad’s paychecks. She showed me how to fill out a deposit slip and hand the cash to the teller. She taught me how to balance a checkbook by just using simple math, no special software required. I watched her write checks to pay the bills and put them in the mail. I watched her pay cash for many of our purchases and I linked that cash to the money she’d gotten at the bank, which was the d

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8 Responses to Kids and Money

  1. hair bow girl says:

    We just opened a savings account for our five year old. I have to say I think she is learning a lot when she sees me depositing money into my accounts as well as hers. Good advice I liked your post.

    PS She also gets tokens for every $1 deposit that she can put towards certain items the bank gives kids for free.

  2. Princessperky says:

    I don’t really think it is harder to teach, I just think the opportunities are not there. Because kids and adults are not together much at all. This situation was possible ‘back in the day’ but not quite as common.

    Now we are advised to get a babysitter for grocery shopping, and schlep the kids off to yet another dump and run activity so we can pay our bills online.

    My kids have plenty of activities, but they are also right here when I pay the bills often enough to hear about it.

    Though I do think kids need to play with cash, I don’t feel I need to switch to a cash paying for that.

  3. snshijuptr says:

    You can also turn it around. Many kids have virtual experiences with money that they might not equate with their real life experiences. Help a child understand that just like in NeoPets, World of Warcraft, or other games you must work for money and when you purchase something you must work more.

    A game Wizards 101 let’s students work in game to keep their account running. Alternatively real money can be used to purchase levels or play time.

  4. Jackie says:

    Yeah, I don’t think you need cash to teach kids about money. A check isn’t cash either, just as a credit card isn’t. Kids have said the same things to parents who write checks as parents who pay with credit cards – “just write on that piece of paper to pay for it.” It’s still something that can be divorced from the reality of money. In this day and age, kids need to be taught about money – cash, credit, checks, retirement accounts – the whole shebang. Not necessarily all at once, of course.

    And lastly, while it help tremendously to teach these things you still have to let kids make their own mistakes and fix their own mistakes. My parents are some of the most frugal, fiscally responsible people I know and always have been. And yet, all four of us kids have made poor financial decisions in our lives, some of us still do. Teaching your kids is a great foundation, a needed foundation, but it’s not a cure all.

  5. Awareness Home Funding says:

    Thank you for stressing the importance of teaching our children about money and how it works. The point isn’t so much how you do it, but that you do. Match the method to your kids and what works for them. The idea is to get the concepts across that you have to work to earn a living, that the money you earn is used to support your life style (at any level) and that what goes out, must be less than what comes in. The bigger problem, how do we get more adults to understand these concepts?

  6. Monkey Mama says:

    Agree with the gist – of course.

    I have to echo some of the comments about “electronic money” not necessarily being that hard for kids to understand. It might actually be more “their language” in this day and age.

    Though, truth is, I do have my 4&6 year old pay for things in cash. To get a basic understanding of how cash works. But once they know how to count money and can navigate online banking, they will be switching to mostly electronic banking, I am sure.

    People are appalled I had my first credit card at 16. My parents made it a learning opportunity when I Was young. I’ve never had credit card issues – never paid a dime of interest or a penalty, etc.

    OF course, kids aren’t going to learn through osmosis. You have to talk them through it. We talk extensively with our small children about our finances. Age appropriately of course, but they are well aware that money doesn’t grow on trees.

  7. Amy Turner says:

    I totally agree with you on this post. It IS harder to teach kids about money these days, especially with all the technology we have.

    I am new to the debt blogging world, but just started my own blog to track our experience paying off our CC debt and student loan debt. I am doing it so my kids can read it when they grow up and learn from our mistakes. I look forward to keeping up with your blog as well.

  8. Jamel Rose says:

    Teaching your kids a sense of social ethics includes a sense of charity or giving.

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