Parenting Blog

A Stay At Home Dad’s Tips for Teaching Kids Personal Finance and The Best Money Games for Kids

This post is sponsored by Lexington Law Firm

Ten years ago, I willing waved goodbye to my cushy white collar job, and its beefy annual summertime bonus, to be a full time dad. My daughters were 4 and 1 then, newbies still as this whole ‘life’ thing.

Upon announcing my big news, I was called crazy, stupid even, but other than a rocky first day that had me typing in monster dot com only half-jokingly, there was never a doubt in my mind that this would be the greatest decision I’d ever make. I felt this way because knew I had but one chance to be a full-time dad to my little kids. I had the rest of my life to earn money. It wasn’t even a decision, really.

One of the unexpected upsides of being at home with my kids for the last decade has been the contextually appropriate real-life conversations I’ve had with each of them over grilled cheese lunches and during naptime discussions sandwiched between books and dreamland.

Maybe it’s because I had started and sequently folded my own small business, or because I spent the prior nine years working in the mutual fund business, or maybe because I once climbed out of my own debt hole, spent years repairing my credit, and because I’d very much like my girls to stay on solid financial ground as they grow up, but my lessons often revolved around money, budgeting and personal finance. You know, an average 4-year-old’s all-time favorite subjects 😉

It started with basic math using sugar packets at the table and evolved, over time, to these four tips for teaching kids about personal finance. These are lessons I’m still teaching today to a teenager who has a job and a debit card, and to the pair of girls who run their own small business together.

Teaching kids personal finance

A Stay At Home Dad’s Tips for Teaching Kids Personal Finance and The Best Money Games for Kids

Teaching kids personal finance by playing store at home

Money Games for Kids Age 2-4: Play Store to recreate the retail experience in your living room! Gather up handfuls of stuffed animals, toys, DVDs, picture frames, clothes and other knickknacks. Arrange everything on shelves, tables, sofa cushions, etc, just as you would expect to find in a real store, cut small pieces of paper and write down prices — $.50, $1, etc — and place the prices down in front of the merchandise. Give your toddlers some pretend money (or real cash and coins, if you don’t have a toy cash register handy) and invite your kids to go shopping! Keep the educational element light and just allow your young children to enjoy being in charge of their shopping and getting change from their purchases. As you play store again and again, add some 20% off deals, 2-for-1 sales, and more to evolve your fun money game for kids.

Teaching kids personal finance by playing store at home

Money Games for Kids Age 4-7: Talk to your early elementary school age kids about the differences between ‘wants’ and ‘needs’. Explain how, for example, you would love to eat avocados every single day — that’s a ‘want’ — but on the East Coast the outrageous $1.49 per avocado price isn’t in the budget for 7+ of those kinds of ‘want’ items. Instead, you settle on just 1-2 avocados each week so you can afford to buy more of what the family ‘needs’, staples like laundry detergent, milk, bread, cat food, and so on. Ask your kids what in their own life is a ‘want’ and a ‘need’. Have them make lists on a piece of paper, and ask what they would be willing to give up from the ‘need’ column to get something from their ‘want’ list so that they may begin to understand the tough choices grown-ups regularly have to make in the course of the week.

Money Games for Kids Age 6-10: When you go grocery shopping together, give your kid $5 and tell them to they must find something small to eat for today AND something for tomorrow, a travel package of soap/shampoo, save at least 10% of their money, give you $.25 for gas to get there and back home, and have a little extra left at checkout to say yes to a food bank donation or drop loose coins into a bucket by the register. Aside from rent/mortgage, this $5 grocery store money game for kids is financial life in microcosm. It’s also a lot of fun to watch their small but mighty brains start motoring to find a way to get, say, a piece of fruit, a sweet, and a mini bottle of body wash all to fit within their modest $5 budget while still having money left for savings and philanthropy!

Money Games for Kids Age 8+: Next time you are out at the toy store or at Target, offer to lend your older kids money to buy something they want versus something they need (remember that lesson from a earlier? we are building on that foundation here), on the condition that they work to earn money to pay off the debt within 30 days to avoid a late fee + interest.

When they earn the money, do pay them and let them pay you back — you must allow that actual transfer of physical money take place instead of just wiping off their debt. This will show them what they got paid, what they actually earned. Let them hold those hard-earned dollars in their hands and then experience giving those precious bills up to pay for the thing(s) they wanted so badly and bought on credit from you some 3 weeks ago and have already broken/lost/forgot about/lost interest in.

As you lend and they do or do not pay you back on time, assign them a credit score and teach them that the more timely they are with their repayments, the better their credit score will be and the more willing you will be to extend them credit (loans for the things they want AND need) in the future.

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