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Teaching the Value of Money, part 2

It’s NOT FREE you keep telling them.
Is your fear that your child will be an adult and live with you always because he, or she, doesn’t know how to handle their money, or earn it?
Do you wonder how to teach your child or teen how to deal with money so they won’t live with you fffooorrr-eevvveeerrrr?
I have some ideas, helps and tips that will help you in my series, that teach children how to manage money so they can learn at an early age how to stick to a budget and be responsible. 
Click through and you’ll find some great resources and ways to make your life now, and later BETTER for you and your child.

Teaching the value of Money, Part 2
Let’s start with teaching kids about money.
Children learn to brush their teeth, to dress themselves, to put on their shoes, and money should be as natural and as necessary as these daily significant tasks.
Example speaks louder than any teaching, game or technique ever can. Demonstrate, do not simply explain, good money skills.
Here are a few ways you can help kids understand the value of and how money works:

  • When they go to the store with you, have them look at the cost of an item, then other same products to compare; such as grape jelly, a name brand versus a store brand.
  • If you coupon, have them help you cut out the coupons and talk a bit about how much it will save your budget to use them.
  • Show how to look for a sale versus a sale. When I was a newlywed I went grocery shopping and was so excited I found a ‘sale’ on ice cream and bought a few containers. When I showed my husband my ‘find’ he asked the price. I told him and he laughed, then explained that was the regular price, they had simply put up a ‘sale’ sign. I learned to be conscious of looking for the regular price versus a sale price after that.

Games involving money are effective to teach the concept of paying for items. I found a wonderful website, “Fun Brain Jr” and they have generously given permission to link to their game, “Money Changer”. I believe understanding the face value of each coin and knowing how to make change is becoming a lost skill unfortunately. I really like this on-line game because you can chose the level from easy to super brain as well as from five different countries currency. Click HERE to link to their site. (A Special thank you to Family Education Network for permission to link to their Money Game)

Have a family meeting to discuss the family’s finances. Personally, I did not give exact amounts of how much we earned or other personal money matters. Keep in mind that kids repeat almost everything they hear; not realizing some things should stay private. However, we did go into generalities.
I had play money (just enough to cover budget items to make my point) and a list of our expenses such as: power bill, house payment (again, you can give a bogus number for a concept, depending on how many you want to know your exact house payment. Some people care and some do not, just do what is right for you), food, charitable donations, savings, etc. Then let the kids with the amount of play money you dole out, ‘pay the bills’. It helped a bit when trying to get them to take less time in the shower, to save on the laundry by putting clean clothing in their drawers instead of back in the hamper because they were too lazy to put them away, not to waste food and other ‘parent naggy’ concerns when you can remind them about the cost and where the money has to be divided.
Do NOT, I repeat, do NOT give in to nagging for a treat, or whatever they want, if it is not in your budget AND consequently will be expected every time you go to a store. It sets a terrible precedent of knowing they can get anything and everything they want if they holler, whine and beg enough.
            I have a funny story about not giving in no matter what. At the time, my oldest was almost six years old, and my second was almost four, the third was almost two and number four was very close to delivery. My mom called   and strongly urged me to teach the kids about ‘Stranger Danger’. Mom had heard that if a child is being taken, and he was just screaming, most people would ignore it. However, if a child yelled, “Help, this isn’t my mommy, or daddy,” they would be rescued. So we had the lesson and each of my kids practiced so I could report to my mom that my children would most likely be safe.

           As many of you know, taking three kids shopping is quite a chore. I asked the oldest to watch the two year old in the shopping cart. I picked up a block of cheese and handed it to one of the kids to put in the cart; which was promptly handed it to the two year old for safe keeping. A moment later I looked up just in time to see the two year old biting through the wrapper sinking her teeth deep into the cheese. Argh!
          Meanwhile, as my attention was focused on the cheese, my four year old had wandered off a short distance to the candy isle. He grabbed a piece of candy and said he wanted it. I patiently told him ‘no’ and instructed him to put the candy back, and that it was not in the budget to buy he, and his siblings a treat that day. He bit into the candy in defiance knowing that I would have to buy it. Frustrated, and a little angry, I snatched the two year old out of the shopping cart, and tersely told the six year old to hold the two year olds hand and to follow me.
        I warned the four year old he had better not get into any more candy and to hand it over. He proceeded however to pick up another piece and started to run. Luckily I was close enough I could catch him by his clothing.
       I hoisted my young son over my large protruding belly and told him he was in trouble. To this warning he started to holler as loudly as he could, “Help me, help me, this isn’t my mommy!”
       I didn’t know whether to laugh, cry, or strangle my kid. Fortunately it was a small store close to home and many of the employees knew my kids and me. I started for the exit with the six year old dragging the two year old who was still working on the cheese, passing a store employee, I said, with a tense tone, but with a ‘I’m a good mom’ forced smile while wrestling my four year old, “Please take the candy and cheese, I will be back to pay for them.”
It was embarrassing, but it reinforced to my son that no is NO. The other kids learned also.
Idea:  When my sisters and I were young we would ask our mother for a treat or a splurge item. Mom would open her wallet and we could see that it was empty. Mom later told me that she had a secret compartment in her purse that held her money for groceries and other bills. This is still a great method to consider.

Allowance vs extra – how to have experience
There is a huge division usually in parents who want to pay allowance versus those who do not. It is a very individual consideration.
Our kids had daily chores such as taking out the garbage, helping with dishes, cleaning their bedroom, etc. The small allowance was not tied to their expected daily chores. (Assigning chores teach a responsibility as a member of the family)
We decided to pay allowance, but it was a very, very small amount. The reason why we chose to do this, is because we felt our children needed their own money, that was completely theirs to learn to manage.
Now, the money was not just a free-for-all, there were rules=thus the allowance was a teaching tool. Here are the categories the kids had to allocate money to:

  • Charitable donation – 10%
  • Savings – 10%
  • Gifts – 10% (I grew weary of siblings birthdays, Christmas, etc., and the kids needing money from me so they could give, but it was taking even more from my budget)
  • School/college – 10% (hoped to teach setting aside for later needs)
  • 60% was theirs to do as they wished: movie, treats, hobbies, fun, etc.

To give Extra Money or NOT
There was always a ‘crisis’ financially for my kids it seemed, so I set up a list. I listed extra chores that I wanted, or needed, done but did not fit into their daily chores and helped keep up the house between spring and fall deep cleanings.
Now this list served TWO purposes.

1- If a child/teen wanted extra money they could choose from the list which had a very small monetary value associated with the job. For example the list might include:

  • Clean out game closet
  • Clean baseboards
  • Clean toy side of garage, etc.

Again, the value was small. It is a huge disservice to pay a child/teen who lives in your home a large amount of money for menial labor. It sets them up to expect large pay for anything they do, which is not reality and leads to the expectation that little effort is rewarded with big money. Likewise, it’s important to be fair in compensating kids for the extra work they do.
2- A secondary purpose of the list served to give consequences for broken family rules. I would choose from the list what was to be done and no pay was given.
Side note:  When a child deserved punishment, instead of grounding them to their room, they had to work off the chores I chose, that were equal to the wrong doing committed by the child.

  • The purpose in this was that when grounded to their room, the child could sit or wait out the time, but it did not benefit me or the family, though the offense put others out.
  • We wanted to make sure our kids understood full well that their actions affected others and they should feel some discomfort for their choice.
  • Working it off does give a new meaning and pause of thought before doing it again.
  • It is vital children (of all ages) learn that they can make choices, but they cannot choose the consequences; that’s life and reality.

Birthday Parties
Birthdays are a perfect time to help kids/teens learn to manage and allocate money. Before the event I would sit down with the bday person give the modest budget they had to work with. I would let them have free access to things I had on hand as long as they asked. Things such as cake mix, frosting, paper products, card stock, and things if they wanted to make decorations or invitation to save money, and so forth. The kids could decide what they wanted to do from there. For example if they wanted a swimming party, they had to figure out how many they could invite based on the entrance fee, party favors and a thank you for coming to the party. In my book a tiny thank you to show gratitude for the effort expended to attend the party is a must-do.
Sometimes the girls wanted to make crafts, decorate pillowcases or things of that sort; the budget would need to be taken into consideration to cover those items.
Planning birthday parties in this way help kids learn the following:
1- The sky is NOT the limit.
2- ALL things have a cost
3- How to manage and make adjustments for what they really wanted, such as which craft, which activity, and how many kids to invite.
4- The value of a budget
5- They have ownership in their decisions on carrying out the party (Parents help ONLY as needed)
6- Unless the police are called to the party (kidding- well sort of), just focus on the successes and the good parts of the party. The next year, if needed bring out any lesson learned, but only if the same scenario could happen again. Otherwise forget it. In the long run, remember you are building a confident, independent, responsible person.
TIP: Make this about the kid and his choices. It is not about the parent. This is a picture-perfect occasion to help the child learn about money, realize how much things cost and that they are  NOT always going to get everything they want. This lesson is a way to teach a critical life skill that is worth more than the grandest birthday bash.

School Clothing
When our kids reached sixth grade, we sat down with each and they were given a very modest budget to spend on clothing for the new school year.
We made a list together of needs, such as underclothing, socks, a decent pair of shoes, pants, shirts, etc.
Then we made a list of wants, such as extra jewelry and purses for the girls, things like that.
I did discuss with them how to look for quality made clothing versus cheaply made items and that it is better in the long run to buy quality.
With the list, we looked at the ads (internet makes it all so much easier to find bargains now) and the kids priced out what they wanted versus what they needed. Then off to the store to shop.
Now some of my kids wanted to be fashionable but they didn’t mind looking at garage sales and thrift stores for their clothes. This stretched their budget allowing them buy even more of the things they wanted. However, one of my boys, when he was in junior high, really wanted a pair of name brand jeans. They were so expensive that it would have taken almost his entire budget. We discussed this issue. He went ahead and bought the jeans and a couple of t-shirts and some socks. That was all he was able to get with his money. He did do extra work off the chore list, but his school wardrobe was very small, and, mind you, my kids did not have a lot of clothing anyway.
This was a difficult for me. I worried that the teachers would think my kid was homeless as he wore his new pants and one other pair that he had yet to outgrow, rotating to clean them. It was hard as a parent not to buy him pants just so I looked good. However, I kept asking myself; ‘what will he learn?’  I kept reminding myself that the teachers would not remember in a year, if they even cared.
By Christmas, I didn’t even give him a choice of gifts; he received clothes and one or two inexpensive things he asked for. We talked about his decision made months ago and how he now forfeited a more expensive item he wanted,  for lesser ones because he was getting clothes instead, which was the decision of the giver; also a prime teaching experience.


  • If your child breaks something on purpose, they should be expected to pay for it by working it off, or from their allowance.
  • If a child breaks or destroys something on accident, it is still a teaching opportunity of responsibility. For example:  your son is playing baseball in the yard, and accidentally hits a ball which breaks a neighbors window. Compensation must still be made. The child will have greater respect for you, and himself, if he is taught that amends must be made, even if it is not intended.
  • If you find your child has taken something that is not theirs (of course a 3 or 4 year old will not usually understand this concept) they must be expected to apologize to the person, store owner, etc. and to make arrangements to compensate for the item. Keep it age appropriate.

I hope these ideas give you some food for thought. It is vital our children learn that their money choices impact all other areas of their life, and teaching them proper principles when they are young is the best way.
By being determined to do the right thing, the hard thing, in regards to teaching our children how to handle money, they will have the tools and resources to achieve their goals and dreams; as well as being productive, industrious, happy people who are willing and able to make a better life for themselves and others around them.
Click HERE for Teaching the Value of Money, Part 1
Click HERE for Teaching the Value of Money, Part 3
Click HERE for Teaching the Value of Money, Part 4
Copyright Carrie Groneman, A Mother’s Shadow, 2014

Recognize a blessing and be a blessing today.


  • The grocery store story I could so see happening and have had a few interesting moments in the last few years myself with my two girls out in public places. The park definitely was one where both my girls gave me run for my money where I said no to something and they both ran off (at different times), my younger being the worst of the two, but like you stuck my ground and neither have done this to me again knowing they would be in trouble if they did afterwards. Great lessons here though and thank you once again for giving us your insight on this!! 🙂

  • Carrie,
    What a great job on this post! I love that you talked about having a plan with giving, saving, gifts, college, and playing. I also love that you stressed that kids need to learn how to work for what they want. How to take care of what they have and other’s things and be responsible and more. Great needed post!
    Blessings, Stumbled, pinned, shared, tweet
    Diane Roark

  • Wow Carrie, what a great job you did. I wish I had this to look at when I was raising my children. Great, sound advice on every point. Parents are so afraid that their children might not “like them” when they don’t give in to their every whim. We are doing them no favors and setting our kids up for failure when we want only to be their “friends” and push away our responsibilities. You showed clear examples for learning.
    Thanks so much. Sharing 🙂

  • Valerie Smartmomfinance says:

    Great tips!! I LOVE teaching kids about money and agree that it is just as important as brushing their teeth!!! Good job mama…you are raising those kids right!
    -Valerie @

  • I love your ideas! Instead of grounding … give them something uncomfortable to do, giving them a set amount for school clothes and Birthday parties, and making them responsible even for accidents. I need to be better with all of these!

  • Callie says:

    I had to laugh at your story about stranger danger. My nephew used to yell, “Please don’t hit me!” in the store to embarrass his mom if she said no to whatever treat or toy he had asked for! (She had, of course, NEVER hit him.) It’s amazing how those little ones can figure out which buttons to push to get what they want.
    Thanks for the great ideas on teaching the value of money!

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