Thursday, July 12, 2012

How I taught my kids the value of money

As a single mom with six-year old twins I was always pinching pennies.  It was hard to have to say no when the girls asked for the latest Barbie or wanted to go to the movies but sometimes the pennies just didn’t stretch far enough.  I quickly realized that the girls had no concept of money the day they instructed me to, “Just write a check” for the desired item.  I decided to teach them some math skills along with a basic life skills lesson.  I went to the store and purchased several packs of play money.  When payday rolled around I gathered the girls at the kitchen table along with the stack of monthly bills.  I told them we were going to play a game called PAY DAY.  

I showed them my paycheck and then we proceeded to go to the bank to cash it in.  I counted out the exact amount in play money and put it on the table.  They were so excited about the wad of money and were already planning how to spend it until I showed them the stack of bills.  I explained what each bill was for and said, “Now, if we want to take a bath and have water to drink we have to pay the city bill.  After we all agreed that water was a good thing to have I had them count out the money to pay the bill.  It was then put in a jar with a picture of a water faucet on it.  We did this for every bill we had.  Play money went into each jar with the appropriate label.  After all the bills were paid I then told them we had to set money aside for things like food and gas for the automobile so we could get to work and to school.  Finally, all the money had been dispersed and we all sat at the table looking at the pitiful pile we had left.  We put the meager remains in a clear glass jar and left it in the middle of the table.

I explained to the girls that for the remainder of the month we would have to make choices concerning the things we wanted to purchase or do.  Every time they would ask to go do something or purchase a toy I would have them go to the jar on the table and count out how much money would be needed.  Often they would change their minds when they realized that nothing would be left for the rest of the month.  Then I introduced the jar marked (SAVINGS).  I told them that if we put a little money in this jar each month eventually we would have enough for something special or an emergency.  They caught on immediately. My efforts had paid off.

We continued the PAYDAY game for several years.   When they were old enough to babysit and earn money of their own they continued to use the strategies they had acquired.  The girls learned a very basic life lesson, you don’t spend more than you earn and it is a lesson that has served them well.  They managed to get through college debt free, a feat not accomplished by many of their friends.  They are good financial managers.  They purchased a car (1977 VW Super Beetle Convertible) for $3,700.00 and shared it for 13 years.  When they sold it they made an additional $1000 over the purchase price.  They used that money toward their first trip to England. 

And to think it all started with a few mason jars and some play money!


Arkansas Patti said...

Where were you when I was growing up?? Oh yeah, you weren't born yet. Great lesson all kids could use.

Muffy's Marks said...

That is about the best idea I have ever heard of to teach kids about family budgets. Kudos to you for thinking of it. You girls have a wise mother.

Olga said...

Really, a great idea. I am sending your link to my daughter so she can use this with her two kids. Thanks so much for sharing this strategy.

kenju said...

What Patti said! I could have used you and so could my kids!