An easy money lesson for children

My Story: A Frugal Money Lesson

contributed by Tamara Wilhite

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When I told my kids there wasn't money in the budget for a big activity they wanted to do, they were too old to innocently ask to get it from the ATM. Instead, my kids said, "Well, go work some more to make more money!"

I said, "Well, I'd rather talk about what we'd do with the money we have instead of just going to work more, and we don't always have that option." The talk after that was too abstract, but I didn't want to end it with a simply "NO."

To teach my children about real life money management and budgeting, I picked up leftover copies of Junior Achievement workbooks from a recently taught class. To garner my children's attention, I told them I had a math game for them to work on. We'd do this instead of mandatory summer reading and math workbooks that night.

To simplify the budgeting activity, I asked my kids to pick a job they wanted when they grew up. Then my eight-year-old was given paper with a list of jobs and their monthly salaries and each budget category. My five-year-old was given a stack of Monopoly money and the same sheets of job names, salaries, and categories.

We went through the list of life choices (rent of big apartment versus living at home, eating out versus brown-bagging, car payment versus public transit). My daughter made her "high" and "low" choices and filled out one sheet for each. Her math lesson was then to subtract each category from total salary for a "remaining" number.

My five-year-old had the salary stack in Monopoly money. We had his list of choices, high and low. I put the "money" for rent on the rent line, "food" on the food line, etc. until all five categories were used up. Then we practiced counting the remaining money.

My daughter was happy that her frugal choices left $1,935 per month on the first sheet. Then she did the fancy choices (complete with two-bedroom apartment and designer clothes) and was confused about the minus on the calculator. I explained what a negative number was. Then I explained how many people solve that negative number by going into debt. Then I wrote the next month's budget with those choices plus a new line for debt payment of $100. Now the choices were spend less by the deficit of $100 or go deeper into debt. Several light bulbs went off for her.

My five-year-old and I looked at the leftover stack on his frugal choices. We counted the tens and fifties left. Then we did the expensive choices. There was no money left, and there wasn't anything left for the last line item, which, in this case, was for clothes. He asked what happens in real life. "Well, I'd rather not get new clothes than not have money for food. But that's the consequence of spending money you don't have." My five-year-old looked at the stack of money on the categories. "If you spend less on that, you can do that!" I nodded. "Those are the choices we make."

My children gained major life lessons on money management and math, and all it took was recycling educational materials and framing it as a math lesson. (And my five-year-old learned to count by 20s.)


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