Kids and Money

In a previous post, It Doesn’t Grow on Trees, I talked about the importance of kids and money. I’ve written about this subject on several occasions before ( e.g., Career Advice for Teenagers, Ways for Kids to Earn Money , Kids and Allowances , Kids and Respect for Money ) but as the world around us continues to change, I find that different points need more or less emphasis to fit the times too.

We ran a pretty tight ship I think while our kids were growing up. For the most part, if they wanted to buy something completely frivolous, it was on their nickel. On more than a few occasions, the boys would team up to buy a new video game together, splitting the expense between them. (I expect that bearing the full cost of the frivolous game which would be forgotten in a couple of weeks was even too much for them to handle going solo ). When they started driving, they had to pick up one-half of the fuel expense. As each child got older, we had them picking up more and more of the bill associated with their choices and activities in life.

The point I want to drive home in this post is simply this: the money must go through their own hands.

In order for our kids to really connect with the costs we parents bear in order to support their lifestyle, and the ultimate costs they will have to carry themselves in the future in order to continue that lifestyle, we need to make things even more clear to them.

Take for instance a church youth group winter camp opportunity that one of your kids wants to go to and it costs $100. Most parents will write out a check directly to the church and off the child goes to camp. As far as the child is concerned, it’s like they get to go to camp for free because they never touched the money! If you do not want to be taken for granted nor have the value of money taken for granted, I encourage you to handle these transactions differently, even starting down at grade school age. Whether you handle these monetary events with cash, a child’s checking account or even a credit card, the key ingredient is that the money must literally go through their hands; they must see the money go in, and feel the associated pain to see the money go out! I can’t illustrate this point any better than in How Can I Get My Kids To Respect the Value of Money .

So in the winter camp example, you provide the funds to your child, and they pay the money to the church themselves. I know the difference may seem trivial, and certainly more effort on your part to do it this way, but trust me, the real difference is huge.