6 Great Teachable Money Moments to Share With Your Kids

by Annie Mueller on 14 March 2012 (5 comments)

This post was underwritten by BMO Harris. Learn more from BMO Harris to help your kids understand the value of money.

Handling money is a skill, but it isn't a skill like talking or walking; your kids won't pick up good financial habits just because you have them. It's a skill that must be taught, and you're the best qualified to teach it to your children. After all, who could care more about their future, both financial and otherwise, than you do?

Look for these teachable moments in your life, and use them to pass on the financial insights you've gained over the years. As you share your own good money habits, you're helping your kids build a solid financial foundation for their own futures. (See also: 7 Important Lessons Frugal Parents Teach Their Children)

1. Use Coupons and/or Shop Sales

When your children get excited about some new product, article of clothing, or toy, get excited with them. Then tell them, “I'll be happy to keep my eye out for a coupon or a sale so we can consider buying that item.” Younger children will probably respond with something profound, like “Huh? What's a coupon?” Older children will probably respond with an eye-rolling extravaganza.

For Younger Kids

Coupons give you discounts, you can explain, so that you can save money for other purchases. Sales provide the same thing, just in a different way. That's really all you need to say, unless there are more questions. Then, if a coupon or sale comes along, let your child in on the excitement of the purchase. You've not only shared the concepts of discounts and saving money off the retail purchase price, but you've also helped your child build willpower for the most important financial habit — delayed gratification.

For Older Kids

Put older children and teens on the lookout for discounts and sales. Give them a top dollar, the highest amount you're willing to spend for the item. You can say something like, “I'm willing to spend X amount to buy this for you. You can either find it for that amount or less with coupons and sales, or you can make up the difference with your own money.”

2. Save Money Together

Saving money is a foundational financial habit, but one that can be hard for kids to understand. Even older children can struggle with the “far distant” goals of saving for college or a car, and younger kids don't really understand why all those coins keep going in the piggy bank instead of to the toy store. Fortunately, there are better ways to pass on the savings habit. 

For Younger Kids

Find a big glass jar and put it in the kitchen or another prominent location in the house. Gather the kids together and let them know that this jar is for a special family treat. Have everyone gather all the spare change they can find in the house for a good start. Then keep collecting change until the jar is full, when you get to cash in and enjoy the benefits of all that saving.

For Older Kids

When it's time for a big purchase the whole family will use and enjoy (car, television), call a family meeting. Let the kids know the purchase you want to make, that you'll be saving X amount of money first, and whether that's for the entire purchase price or just a down payment. (You've also just introduced a great way to talk about down payments, interest rates, and credit in general.) When kids can see their parents saving for a big purchase instead of opting for instant gratification, it makes the concept of waiting and saving real and important. You can also invite them to contribute, so the purchase can be made sooner.

3. Purchase a Gift for Someone

For a very simple introductory lesson in setting and sticking to a budget, use the next birthday to appear on your calendar. A one-time, one-item purchase is a simple way to understand and apply budgets, which makes it easier for kids to understand and apply budgeting to bigger, ongoing expenses. 

For Younger Children

Set a budget first and share with your child how much the budget is. Explain that a budget is the amount of money you have available to spend on the gift — it's okay to spend less, but you can't spend more. Then go shopping. When you spot something that might work, check the price first. Ask your child, is this more or less than we're able to spend today? Keep at it until you find something that fits both the recipient and the budget. 

For Older Children

Send them out on their own (if appropriate) with the amount of money you're willing to spend and a few ideas for a gift. Have them include a cost for gift wrap in the budget. They'll need to deduct the amount from the total budget.

4. Plan a Vacation

Planning a vacation is a fun and more involved budgeting experience. Kids can't help but get excited about a vacation — new places! Out of school! Hotels! Camping! Eating out! What they easily miss is the cost of a vacation. Let your kids help you plan; they'll not only have the fun of anticipating, they'll also start to appreciate the monetary value of the experience.

For Younger Kids

It's often easier for kids to understand a budget when it's applied to a limited situation like a vacation. Sit down with them, your vacation brochures, and your budget. Explain options, such as, “This hotel is more expensive, but it has a bigger pool. We could have fun in the pool, but we could only afford to stay for three nights instead of four.” Let them share what their own priorities are (bigger pool, more activities, more eating out, more time?).

For Older Kids

Let them see your budget and the choices you have for spending money. Then ask them to make some of the plans. For example, spend more on eating at nicer restaurants, but skip that amusement park? Or pack picnic lunches and save enough money to stay an extra night?

5. Repurpose, Repair, and Reuse

Avoiding unnecessary waste is a thrifty habit, and an environmentally friendly one. Introduce your kids to the 3 R's of saving money on stuff: repurposing old items, repairing broken or worn items, and reusing by purchasing used (rather than new) items. These skills are a step up from using a coupon or shopping a sale, and they will make your kids more self-sufficient and financially savvy.

For Younger Kids

Make seasonal purchases from thrift stores, garage sales, or online classified ad sites such as Craigslist. Let your kids know what you're looking for. Explain that the reason you're purchasing used (ski coats, roller blades, whatever) is because you'll not only be saving money (by not paying the purchase price of a new item), but also because you'll be avoiding waste, which is really another way of saving money. 

For Older Kids

Finding a way to repair broken items rather than toss them out and purchase replacements is both financially and environmentally smart. Give your older kids some lessons in basic fix-it skills, such as fixing a bicycle tire or sewing on a button or a patch. If you have the time and ability, help them develop more advanced skills as they are ready, from basic engine maintenance and repair to using shop tools or a sewing machine. Don't be overwhelmed; the idea isn't that you have to teach them all the repair skills they can know. You just want them to catch the concept of saving money by being able to learn and apply repair skills when needed.

6. Help Out the Less Fortunate

There's nothing like some perspective to help kids understand how much they have. Seeing how little other people have can help kids to appreciate and care for their own things. Finding those teachable moments together will not only instill gratitude, it will also help them build habits of being generous with their time and money.

For Younger Kids

Get your kids involved with a community project for the needy, whether it's helping gather Toys for Tots or collecting cans for a food drive. Doing this sort of volunteer work together can start all sorts of conversations — what does it mean to be poor? To be rich? To be jobless? To be homeless? Why does this happen? What's it like in other parts of the world? 

For Older Kids

Volunteer as a family at a soup kitchen or homeless shelter, or take older kids on a mission trip to a third world country or nearby community in need of help. Don't miss the opportunities that come around unexpectedly, too, whether that's baking cookies for a sick neighbor or buying gas for a stranded stranger. It's easy to overlook teaching children how to be generous with their money, but don't make that mistake, even if giving means a sacrifice for the family. Learning that money is a tool to help other people is an important part of a complete financial education.

What kind of teachable moments do you share with your kids?

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Guest's picture

#5 and #6 are by far my favorites. We teach our 6-year old son about the environment and helping others in need first and foremost. He learns this by donating his old toys and re-gifting his old toys at birthday parties. We also focus on the thought of the gift, instead of the actual gift itself. If our son wants a toy, he can save up for it (we don't usually buy him toys).

Another great tip is to lead by example. We don't buy ourselves much stuff and we focus on using the great outdoors as our playground. As a result, our child hardly ever plays with toys because we are usually outside playing in nature, or inventing games, or using things we already have around the house.

We also don't go out to eat at restaurants. I think a lot of people spend a lot of money that way. And, we bike everywhere. Kids really pick up on what their parents are doing, as long as you don't make your finances and the reasons you're doing things a secret.

Thanks for the reminder that teaching kids about money can start at a really young age!

Annie Mueller's picture

Leading by example really is key, to all of these tips. Great point. If we want our kids to have good money habits, WE need to have good money habits.
I just recently packed up about 80% of our kids' toys, in anticipation of a move in the near future. The move got delayed, and the kids have had about a month without most of their toys. And they haven't asked for them a single time.
As a family, we love being outside, creating art, and going on adventures, whether that's in our backyard or on a bike ride or somewhere new. I hope those experiences will teach our kids, like you are with your son, that the true value isn't in stuff but in what you do with life.

Guest's picture

This is a great post. I am especially partial to #6 and helping people less fortunate. We take several opportunities throughout the year to give back. I think it is also valuable to assist your children in learning the dangers of giving handouts.
On his blog, blog maverick, Mark Cuban wrote a great article on kids making money. It's worth the read. http://blogmaverick.com/2012/02/29/making-money-as-a-student/

Guest's picture

Thanks. These are great suggestions. #5 seems to be a foreign concept in some ways and some choose not to follow that route, but it can teach kids to appreciate and take care of things. #6 helps us learn early to think of others.

Parenting and Money's picture

#5 and #6 is a ways of living in our household. Our son is only 18 months but I am taking notes on this topic. I want to ensure I raise him with good values when it comes to money among other things of course.