Mummy Thoughts

Getting Kids to Understand Money

Now that the kids have an allowance, that means that they have spending money.  A month ago I wrote about how to divide up the kids allowance.  Dividing it up into “Play”, “Giving”, “Education”, “Long term savings for spending” and “Financial Freedom”.  With their “play” money, they can go to the store and buy whatever they want, I can’t say anything.  After making a few trips to the store with the children, I realized that they were not prepared to deal with the money themselves.  Some of the cashiers were patient with the children when they took their money out of their purses themselves and paid while others were not so patient.   This made it a little difficult for the kids who are dealing with money for the first few times.  I also made sure they had to know whether they were getting the correct change.

My last experience was not a very happy one as the cashier refused to ring up the totals separately so it made it confusing for the 3 children when they were paying from different purses and not getting the proper change.  After this experience, I have decided that they have to be more comfortable dealing with their money and able to access their money better.

The first thing I have to do is to get them all a proper wallet.  One that has a compartment for bills and another for coins.  It gets a little hairy when they pull their money out of their purse and you have to make sure that they are not dropping the coins or the bills…

The next thing that I have already started is using money to “play” store.  Matthew being 8, understands how much money to give and how much change he has to get back.  He has to think about it but the mental math is working.  Andrew at 6, knows his money, knows how much to give, unfortunately he hasn’t gotten the concept of how much change he has to get back.  That will be part of our Math curriculum.  Natalie who is 4 is still learning to recognize the coins. We need to “shop” a little more!   That will come in time.  The fun thing with siblings like Matthew, he is always wanting to help and teach his younger siblings.

To help with these issues, this is what I have done. I got myself a set of “fake” Canadian money and use it to buy and sell things.  Everyone sets up a little store and we sell things and price it so that they have to how much to give and how much money to get in return.  The lesson here is not to learn the value of things just to learn to use money.  We buy and sell from each others store and make sure we get the correct change back.  Matthew even had a bowling alley that you pay to bowl at, a fun little variation.

Learning the value of items is a little different, when we go shopping, we do price comparisons.  If something is $X, what is the value to him?  Is the same product cheaper somewhere else?  We figure what else can he purchase with the $X and help figure whether the product is worth that amount of money.  For example, Matthew bought a Papo dragon for $30, I didn’t say anything as it was his play money.  A week later, we returned to the store and found out that that item was 20% and he realized that he could have saved $6 if he had waited.  While contemplating the money that he could have saved, he figured out what he could have gotten for $30 instead of just one beautiful dragon that just sit on his shelf.  He then realized that he had made a mistake in purchasing that dragon and fortunately for him, he was able to return it.  Learning the value of items will come with time and exposure.  So going out and purchasing items with their play money is good practice for future larger purchases…

3 thoughts on “Getting Kids to Understand Money

  1. Pingback: want to teach your kids about money | Meet Jodi Lee

  2. John E. Laine

    Fantastic !!

    I Thoroughly enjoyed this post, as I can easily visualize the frustrations and successes you must be having as a parent, trying to teach these core values to your children.

    I do not even have kids, and I can see the benefits of this process. 🙂

    I am currently writing a book called “The Kool-Aid Kapitalist” and I would love to know if you have a book you are planning of publishing ?

    2 reasons for this,

    1, i like to collaborate with other authors, and work together on themes,

    and 🙂

    2, i am partners in a small but thriving publishing company 🙂

    I am passionate about teaching people how to create wealth, and freedom, and I would enjoy talking with you further.

    Please contact me at or on Skype at John-The-Capitalist

    Have a terrific day 🙂


  3. Pingback: Boys First Job | Mummy Thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.