How to Help Kids Learn About Money

The way I taught my kids is passé

These new debit cards are now being wielded by the small hands of my young grandchildren. I hope their financial literacy is off the charts! (Photo by Michelle Teheux)

When my kids were little, I taught them about money and responsibility by drawing little chore charts and handing out dollar bills for allowance. 

That approach isn’t enough today. For one thing, a lot of us seldom touch actual currency anymore. I paid everything by handing over cash or writing a check until well into adulthood, but my son has never written a check in his life. 

My grandchildren have their own debit cards

My grandchildren are only 6 and 10, but they’re already learning how to handle their new debit cards. I reviewed a list of apps via NerdWallet and chose Greenlight, which costs me $4.99 per month plus the money I use to fund my grandchildren’s allowances. (That is a referral link to Greenlight if you are interested. It will save you $30 and I’ll get a bonus. But you can also sign up without my link if you wish, or choose any other similar product – I am not here to sell you any service. Make the choice that’s right for your family.)

My daughter is able to choose what chores each child is responsible for doing each week and if they complete them all, they’ll gain access to the grand sum of $5 per week. You can set whatever amount you want and can bump it up as the child gets older. 

You also don’t have to tie the allowance to chores. There are options for saving, giving and investing, too, which I want to help the kids navigate once they’ve grown comfortable with the basics. I plan to increase their allowance over time so they can do so.

They can track their spending on a tablet or phone using the app. It’s the first step of learning online banking.

This ties into my windfall

If you read my piece What I Did With My One Week of Wealth, let me update you! My viral Medium story has now made more than $20K, and that’s what is allowing me to commit to funding the Greenlight app and the weekly allowances for my grandchildren. 

I spent some of the money on unmet needs and a bit of it on pure pleasure. Then I invested a chunk. The rest is in my savings account, ready to cover the cost of kid allowances for quite a while. The cost of the app and the allowances together will run me $540 per year and I couldn’t have committed to that if not for the windfall. So thank you to all who read my viral Medium story – it’s helping me teach the next generation about money.

Some money attitudes seem to be innate

My kids always had different spending styles. My daughter loved to buy small pleasures for herself and was often broke. My son probably still has his first birthday dollar tucked away.

My son was one of those kids who always had money on him. Sometimes, you’re out and feel the impulse to splurge by buying your kids some ice cream, but before it became possible to use a credit or debit card to pay for drive-through purchases, I would typically realize I wasn’t carrying enough cash. 

So I’d borrow it from my young son. He’d have a couple hundred bucks in his wallet while I’d have a handful of change in mine. He was my payday loan guy, except he didn’t charge interest.

The lunch money scam

This story tells you everything you need to understand about my son and money: He figured out that the lunch ladies would give a kid without lunch money a free peanut butter sandwich. After that, he never paid for another lunch – until a teacher ratted him out to me. 

The realization that the cafeteria staff thought I just wasn’t providing lunch for my son embarrassed me deeply, which my son could not understand. He thought he had found a clever loophole: “But Mom, they’ll give you the sandwich for FREE!”

And what did he do with his ill-gotten riches? 

Nothing, except occasionally loan a few bucks to his mom. He let the money pile up as if he were Ebenezer Scrooge. He just liked having it. 

A couple of years after my marriage to my children’s father ended, I sold the family home and bought something much smaller that I could afford as a single mother. 

Until we moved, I was about $200 per month short of being able to afford the family home and one of the things I had to discontinue was paying allowances. 

After I moved us to the smaller house, I had some financial breathing room again and wanted to teach my kids about money. I gave them extremely generous allowances and specified that they’d be responsible for paying for most of their routine expenses – if they needed to buy a birthday present for a friend, for example, they’d handle that themselves. Ditto for Christmas shopping. They had the option of buying the school lunch or packing one from groceries I purchased. I bought their basic clothing, but if they wanted something special, it was on them.

My son really had nothing to learn. He was born thrifty. Parsimonious, even.

But I think this really helped my daughter. Today, she’s very responsible with money, but for her, it was not innate. She had to learn. 

I can’t resist sharing one small story about my daughter’s money journey! As a teenager, she was having trouble figuring out where her money went, so I helped walk her through her routines. 

We lived near the high school she attended – one of the reasons I chose that house – and smack-dab in the middle of her walk was a doughnut shop. It was her practice to pop in and grab a treat each morning. Each such indulgence seemed minor, but over a week’s time, the cost added up. She solved the mystery of her budget hole and learned the lesson that little costs can add up to big costs.

I’d rather a child learn about money when the sums involved are small and they can’t get into too much trouble rather than have to figure it out on their own when they get their first real job and apartment.

You hear about young people who run up thousands in credit card debt and then have that millstone around their neck for years. My kids avoided that trap. I hope that by the time my grandchildren are adults, they’ll be old pros at handling money, too.

Money is just a tool

Money isn’t the root of all evil – people often forget the Bible verse actually says it’s the love of money that is the root of all evil. Like vacuum cleaners, washing machines and lawn mowers, you have to teach your kids how to use the tool of money. 

And in my opinion, one of the most important things to teach them is that if you have a little extra, you share with someone who doesn’t.

At one point, my son’s friend needed to live with us for a year or two, and his parents declined to provide financial support. They also wouldn’t permit him to get a part-time job because they needed to stay within certain household income limits. (Needless to say, they still counted their son as living with them and took him off on their taxes).

My son didn’t say a word about any of this. He just quietly used his wages from his part-time fast-food job to cover his friend’s needs until my husband and I realized what was happening and began paying instead. I’ve never been so proud of my son.

My kids and my son’s friend are all responsible adults now. 

I can’t wait to see what my grandchildren learn

They just got their cards, so it’s too early to say how things are going to shake out. 

Will they now eagerly do their assigned chores without nagging, thereby lifting some of the housekeeping burden from my daughter’s shoulders? I hope so! 

Will they use their cards to pay for small indulgences instead of asking for money? I hope so! 

Will they, in time, learn to save, invest and give away some of their money? I certainly do hope so!

Here’s the sign-up info and my referral link

Earn $30 when you sign up for Greenlight. With the money app and debit card for kids and teens, we can send our kids money instantly, assign chores, and teach them to earn, save, and invest. https://share.greenlight.com/171650566

About Michelle Teheux

I’m a writer in central Illinois. If you like my work, subscribe to me here or on Medium. My new book is The Trailer Park Rules. It’s about people living in a trailer park whose lives are sent into crisis when an out-of-town corporation buys it and jacks up their rent.