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Kids and the Magical Money Machine

Yesterday, I went to several stores in search of play money, to aid in training my kindergarten Girl Scout troop for their first cookie sale. It was nowhere to be found. I did, however, find a toy ATM, a purse that included 3 pretend credit cards, and a cash register with a debit card.


With direct deposit, debit cards, and online budget tools, most families never actually have cash in hand. But, what is that teaching our children?

When my oldest was three and was told we didn’t have the money to buy something she wanted, she said we should just go to the bank and get some. That’s when it hit me that I have to teach her where that money comes from.

Kids don’t understand electronic transfers or inherently know that if you use a credit card, you still have to pay the bill later. It’s up to us to let them know how money works in a tangible way. Here are a few things we do to help our girls understand the value of money:

  • Use cash whenever possible. Not only does this teach kids that money is real, but a cash budget can help you keep better control of where your money is spent.
  • Discuss the difference between needs & wants. On Christmas Day, Lorelai told me Santa brought her a DS because she really needed it. Um, oops. That prompted a discussion we’re still having on needs, wants, and how blessed our family truly is.
  • Let kids pay — with cash. I never let my girls swipe the credit card, as much as they ask. I want them to understand that credit cards are a grownup responsibility. I do, however, let them pay for things when we are using cash so they can begin to see the value of the things we buy.
  • Share the cost of living with your kids. Even if you don’t want to share the actual numbers with kids, give them comparisons for how much things cost. Our kids know that their school costs the same as our house. That we don’t have cable so we can do something fun together every month. And, that we can go out to dinner once a week OR save money for a vacation, but not both.

How do you teach kids about money?

Photo Credit: Flickr


Your Child’s Allowance: How to teach your kids about money management

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