Money Lessons Learned from Kids

By Staff

The other day my son wanted to buy a “prize.” He had some allowance and gift money saved up, and all he needed from Dad was the transportation.

When he was much younger, Dad kept up with his allowance and gifted money and doled out just enough to pay for whatever toys he picked up in the store. However, these days I’m trying to shift that responsibility to him, and teach him to not only spend his money wisely, but manage it wisely (to include safely transferring it from wallet to cashier and back).

Spending Cash Hurts

It probably sounds elementary, and in a way it is, but I strongly believe in something I’ve dubbed “transactional pain.” That is, the twinge you feel when you hand over cash from your wallet to someone else who buries it in their cash register drawer and slams it shut, leaving your wallet a little thinner.

This transactional pain is hard to duplicate with plastic, and it is certainly hard to replicate when someone else handles the transaction for you. You need to see it, feel it and experience it for yourself.

Over time, I’ve noticed my son has become more frugal during these infrequent trips to the store for a “prize.” Just the other day he spent nearly 10 minutes in the toy aisle agonizing over buying one Lego set or two.

I explained that if he bought two it would leave him with $10, but if he bought one he would still have $30. I assured him that he could buy both if he wanted, since the bulk of this money was left over from Christmas. The choice was his, even though deep down I wanted to steer him in a certain direction.

He decided he wanted both toys and we headed for the checkout. He was quiet, and I knew what he was thinking. About half way through the store he said, “Dad, I don’t really need both of these. I want to put one back and save my money.” Naturally, I told him that was a smart move and we returned to the toy section to put back the second Lego set.

Future Frugal or Future Cheapskate?

I shared the story with my wife and we joked that he will probably grow up and have more money than all of us, but we also don’t want to raise a Scrooge, or a cheapskate. That’s why, if you will indulge my recounting another moment of parental pride, the next money decision from my son made me even more proud.

Over the weekend my daughter shared with us that a school fundraiser she had participated in didn’t do so well and the organization for which they were raising money was hurting. Her teacher asked students to take the forms back home and ask if anyone else might be interested in buying a discount card (local business sponsor this endeavor by offering discounts for holders of this card throughout the year).

The cards are $10, and nearly everyone we knew that wanted one bought one during the first round (yes, even Mom and Dad). Hearing my daughter’s passionate pitch my son responded, “I’ll buy a card from you. I can save money at Krispy Kreme!”

This drew laughter from the dinner table and I explained to my son that Mom and Dad already had a card, and really only one member of the family needed one to get a discount if we went out to eat (or bought a box of doughnuts). He frowned, insisting that he wanted to help his sister.

When You Can Afford to Give, Give Freely

I immediately backed down, recognizing a teachable moment, and told him if he wanted to support the cause with this own money he could give $10 to his sister in exchange for his own card. He excitedly ran off to get his wallet, not asking how much money he’d have left, and without agonizing over his giving decision.

It was one of the times when you look back over all the lessons you try to teach your kids and see that maybe, just maybe, one of those lessons stuck. If my son grows into a young man who continues to give to worthy causes without hesitation, to help his family, and to agonize over buying toys, well, I have to say my wife and I have succeeded as parents.

Let’s just hope these ideals survive the teenage years!