5 Hands On Exercises To Teach Your Tweens About Money

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If your child learns the value of a dollar early in life, she’ll turn her future income into wealth.

I’m a career financial planner and a mom, so money lessons were an important part of my kids’ upbringing. As I watch my adult children make money decisions today, I can see that they took the lessons to heart.

My son negotiated a $5,000 bump in salary after receiving his first job offer. As a result of that money move, he may make $600,000 more over his lifetime (according to a study by George Mason and Temple University). Another son saved all of his bonus money and bought himself a condo at age 27. He didn’t want his rent to pay for someone else’s mortgage.

Where do you start with your pre-teen, and what lessons should you teach them?

 

1. Teach your kids to pay for their own stuff with their allowance.

This may seem basic, but in order to learn about money, they need some to work with. Tie allowance to chores so they see the correlation between working and money.

My kids got $1 per week for every year of their age. When they were 10, they got $10 per week, and they had to put half in savings. In fact, I really only gave them $5 and put the other $5 in savings for them before they even saw it (similar to a 401(k) plan at work).

The kids had to manage their allowance money to buy the things they wanted, which was a great learning experience. As an added bonus, I didn’t have to constantly hand out $20 bills. For example, they paid for entertainment, such as going to the movies with their friends and buying video games, with the allowance money.

Granted, I could afford to give them this money at the time. Do what works for your family.

Lesson: People learn through experience. Give kids a bit of money and put them in charge of managing it.

2. Learn simple negotiation skills.

My son Rick’s first job offer was not his first negotiation. He started at age 10 at local yard sales. My husband and I taught him two tactics: Negotiate for price and ask for additional value.

We started with action figures that cost $1. Rick asked if they would part with them for 50 cents. When he heard a no, he’d ask for three for $2 instead. We just wanted to get the kids into the habit of asking politely to find out the seller’s bottom line.

Lesson: Ask for a better deal, and you may get one. Find the other parties’ true price. There is no harm in asking.

3. Set a budget.

Instead of simply purchasing your child’s sporting equipment or hobby supplies, set a budget and work with them to maximize it. For example, if your child plays baseball or softball, determine an amount to spend on their bat, gloves, and cleats.

Take your time and shop three ways: retail (on sale if possible), used sporting goods stores, and person to person. Compare prices and put your money where the value is.

Lesson: Teach your kids how get their needs met within a budget. If they want to purchase everything new, they may need to watch for sales and promotions.

4. Dollars add up, so don’t waste them. Save them for something fun.

To teach your kids the value of a dollar, play the dollar game. Get 50 $1 bills from the bank and put a big glass jar on the kitchen counter. For one week, find ways to change behavior in the family to save $1 at a time.

Some examples:

Drink a glass of water when going out to eat instead of buying a soda
Peek in your freezer and pantry before heading to the store instead of buying duplicate items by mistake
Make dinner at home with what you already have
Use a coupon to purchase toiletries
Buy specialty hair-care products at discount stores such as TJ Maxx or Marshalls instead of the salon or grocery store

Every time you save on a purchase or don’t make a purchase because you don’t need it, toss one of the dollars in your jar. Then use that money toward family fun, such as entrance to the zoo or a movie night.

Lesson: A dollar here and there adds up. Spend your dollars where they bring your family the greatest value.

5. Do it yourself.

One of the most valuable lessons I learned as a kid was how to sew. At the time, I didn’t know it was a money lesson! When I moved into my first apartment, I was able to make my own curtains out of old sheets, as well as repair clothes. The skill of sewing and my Mom’s old sewing machine served me well over the years.

One way to promote learning skills that are valuable is to make gifts for others. Grandparents especially love this, of course, but learning to D-I-Y gives teens a sense of accomplishment and confidence.

For example, your child with artistic tendencies can make their own greeting cards with some cardstock, a pen, and a simple watercolor set. Check out The Postman’s Knock page on making watercolor cards. Sign them up for a class on watercolor painting and get them started bringing joy to others with their talent!

Lesson: Learn a skill that is valuable to save money and potentially be marketable in the future. Share your talents and gifts with others rather than making a purchase.

Teach your kids to understand the value of a dollar early on. Over their lifetime, millions of dollars will flow through their fingers. If they understand that one simple dollar can make a difference, then it will — to their future.

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