How to teach kids to manage money

May 252011

Kids love amusement park and gifts shops so when you plan your amusement trip next time keep the following  tips in mind. Thanks to Paula I learned how to do it, please read her story below:

A few years ago, we decided to designate a certain amount of money for special purchases whenever our family went to an amusement park.  We figured out what we could afford ($25, but $15 would have been more than enough) and then told our children, then 5 and 8, how much they were allowed to spend.  We told them the money was theirs.

You can imagine their beaming faces as they suddenly received free money. We, the parents, became the money carriers, but allowed the kids to spend as they desired. It could be used for toys or candy or extra drinks, it was their decision.

It was very interesting to watch them as we travelled the park.  They’d say, “I want this or I want that” and we’d respond by letting them know how much of their money it would use up.  We also occasionally informed them that it was more than they could afford.  What a relief to see them decide whether it was truly worth it to invest in the stuffed Shamu if that meant they couldn’t have a frozen lemonade later.  They  took more responsibility in their choices and truly appreciated and reused whatever they purchased.  No more blinking lights which cost $7 tossed into the garbage the following day.  It makes my cheap parental heart leap for joy.

This is a good way to teach kids how to manage money, how to assess value and how to understand scarcity. It also helps to extend the pleasure of shopping.

children managing money

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