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FALL 2018 HOMESCHOOL IOWA 9
Create Spending Plans. Children who are a bit older and who
have some math skills can graduate from envelopes to create
simple spending plans for themselves. Start with weekly spend-
ing plans; then help them with monthly plans once they get the
hang of it.
3. Money is Earned (ages 4-12)
No, money does not grow on trees! But kids don’t necessarily
grasp that what you or your spouse do all day while you’re away
from home (or from home) is what allows you to put food on the
table and toys in the toy box. Help them understand how your
family earns money and let them earn some of their own.
Take your child to work. Some employers encourage this;
some do not. If you can’t bring your child to the workplace, take
excursions to explain what you do. Show them the house Mom-
my designed or the law books Dad studies to help his clients.
Create a list of kid-friendly chores. Together, decide on small
chores they can do to earn extra money. Set a “wage” for each
one. Older children can even invoice you at the end of the week.
(Make sure you set a limits on what they can earn based on what
you can afford so your budding entrepreneur doesn’t break the
bank!)
4. Wants Versus Needs (ages 8-12)
Kids much younger than eight will have trouble grasping this
lesson — as do many adults I know! But it’s important to help
your kids understand the distinction. A need is more connected
to survival. A want is a desire that we can certainly survive with-
out.
Distinguish common purchases. Make a list of items that you
commonly purchase, everything from bread to new shoes. Have
your child rank each on a scale of 1 (just nice to have) to 10 (need
to have.) Discuss the rankings without making them wrong.
Play “What’s the Worst that Could Happen?” Using that same
list or other items you and your child might want to purchase,
ask “What’s the worst that could happen if we don’t get this?”
Share your own Delayed Gratification list: Make a list of all of
your personal “wants” that you are delaying for other priorities.
Share the list with your children, and explain your reasoning. En-
courage them to make their own list.
5. Understand Impulse Buying (ages 8-12)
Again, younger children may not be able to grasp this lesson.
But it’s critical for older kids to be aware of howMadison Avenue
is trying to manipulate them!
Critique commercials. While watching TV with your kids, ask
them what advertisers are trying to get them to do. What is the
underlying message? What are they saying will happen if you
buy or don’t buy that product? How does the product look in
real life (i.e. that Big Mac) compared to the advertisement?
Offer “now versus later”deals. For example, offer your children
$5.00 today or $15.00 in two weeks. Which do they want? Talk
them through the decision. And if they decide on the $5.00 to-
day, check back with them in two weeks and ask how they feel
about that decision.
Create a Spending Pleasure Meter. Have your child create a
visual that represents how much pleasure they feel about vari-
ous purchases. It can look like that old carnival game with the
bell on top or like a speedometer that shows 0 to 100. (See the
Spending Pleasure Meter for an example.) Whatever they come
up with, ask them to rate potential purchases on this meter be-
fore they head to the store. Ask them to re-rate that purchase a
few days later.
I hope you find these lessons and exercises useful. One last
note: One of the most important things in teaching your chil-
dren about money is to allow them to make mistakes, and let
them experience the consequences of those mistakes! You’ll find
that there is no need to scold or lecture them. If Jimmy blows his
allowance on candy so he can’t go to the movies with friends,
great! It’s a lesson that will definitely stick. Better to have your
children get these tough lessons while they’re still under your
care.
Pamela Yellen is a financial security expert and author of two New York Times best-sell-
ing books, including her latest, The Bank On Yourself Revolution. Readers can boost their
financial literacy and discover their Financial IQ by taking Pamela’s eye-opening Financial
IQ Quiz here:
Copyright, 2015. Used with permission. All rights reserved by author. Originally ap-
peared in The Old Schoolhouse® Magazine, the family education magazine, Fall 2015.
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