Do Your Kids Understand the Value of a Dollar?

Updated on November 03, 2011
M.D. asks from Washington, DC
8 answers

I always explain to my kids what we are saving for. I posted before about my sister getting married in St. Lucia, and I am doing my best to save the money to get there. I told her we would come one day before her wedding, and stay 4-5 days after as a vacation for us. If I'm going to spend that money, it won't be 100% for the wedding. I think St. Lucia would be a great vacation spot, so we'll make our final decision next fall as to whether we can put enough money aside to pay for it or not.

So I sat my kids down and told them where my sister wants to get married and that it is expensive. I told them that if daddy and I say "we are not eating out tonight" or "we are not buying things for the heck of it," it is because we are going on the vacation. The next night we were out and didn't get to even think about dinner until 830, so I asked my boys what they wanted to pick up. My 4 year old started crying because he said he didn't want to eat dinner if he couldn't go to the wedding. Aw! I told him it's okay sometimes, but we just need to be careful and smart. So my kids know that when we go into extra savings mode that something good comes at the end of it. They hoard their money like it's the Great Depression again.

Do your kids understand savings and why to have it?

My kids are 8, 6, and 4...and we've been doing this with them since we started vacationing on a regular basis in 2009. Prior to that money was so tight we couldn't vacation period :).

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So What Happened?

@ Rachel - I agree though. I think when you are in or have been in the broke beyond belief stages it gives you a healthy dose of understanding and teaches your kids too! That's great that they understand so much!

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answers from Erie on

No.. not a $1 bill but $20 YEAH!! Usually everyday after i get home from work.. ill give my daughter a few ones or some change from my tips.. we even got her a piggy bank that she painted herself to put this money in. Now the piggy bank is full, but whenever i give her ones anymore she seems to forget about it like its not money! i even caught her throwing one dollar bills in the trash before.. but if i hand this little girl a 20$ she holds on to it closely.. this question kinda made me laugh with the headline, cause i never acted differently when handed her a bill.. big or small

2 moms found this helpful

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answers from Washington DC on

Greg and Nick get it - although there are times when they don't understand why we don't have credit cards like we used to. It's been 5 years since we had credit cards, but they remember us pulling them out and paying for stuff....and really that's what it was STUFF.

Since we have really tightened our belts this last half of the year, they are doing their part to help us save money. Which I think is really sweet. Nicky had asked if they could order the movie "Transformers: Dark of the Moon" for $5 on PPV - we said No. I will go to Red Box and get it for $1. Nicky ran upstairs and pulled his piggy bank down and said "Here Daddy - here's $5 so that you don't have to go out in the cold to get it." aaaawwww!!!

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answers from Richmond on

My daughters, 6 and 8, are starting to get it. They know money is tight right now due to a bunch of unexpected expenses. I flat out told them that we would not be doing or buying anything 'extra', but we're still going to have everything we NEED, just not always what we WANT, and we're still going to have tons of fun!!

Instead of taking a big vacation, we'll go camping.

Instead of buying things we don't need, we'll save for what we REALLY want.

Instead of going out to their favorite Mexican restaurant, we'll do taco night at home.

Instead of going to an amusement park, we'll go to our local parks.

They get it :) My 8 year old, like your kids, hoards her money like it's nobody's business (and I've been guilty of borrowing $5 from her, LOL!!)... the 6 year old still asks for, you know, EVERYTHING on EVERY toy commercial she sees, then the 8 year old says 'Madi, you know we can't afford that right now'... and then they'll go to their room and see if there are any old toys they can 'sell', so they can afford something new (they got that from me, I'm notorious for selling stuff on craigslist to buy something else, LOL!!)...

They're getting it. Kind of sucks that we had to be 'broke' to teach them this lesson, but they are not needing anything and they're learning a valuable lesson!!

2 moms found this helpful


answers from Dallas on

My kids are pretty good. I was always careful not to give too freely. I gave an allowance and if they wanted something for no reason in particular they had to pay for it themselves. They had to save as allowance wasn't much.

My youngest son saved and was always very careful with his money. He was always saving for something. Then he went away to college and blew every nickel on eating out and videos........ He worked hard this summer to replenish his funds. We give a monthly allowance, but it's tight..... so lifestyle had to change. It will be interesting to see what he has left next summer.....

What I'm saying is..... I thought my son understood the value of a dollar, but now I'm not so sure.

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answers from Savannah on

My 23 month old doesn't know anything about money except it's shiny, and don't put it in your mouth! He knows it's good though, if he finds a coin he smiles so big his face might crack, and keeps it in his pocket, and checks to make sure it's still there often. He knows before bed when we're changing into pjs, the coin goes in his green piggy bank. That's about it.
My 5 year old: he started "working" for an allowance about 6 weeks after his 3rd birthday, and he does understand money pretty well. He can earn a quarter a day (but payday is Saturday night). Every evening he gets to put a star sticker on the day if he's earned his money. On Saturday we count the stars for the week, and that's how much he's paid. (Occasionally I'll put a second star on the day if he's done something over and above--extra patience or playing with his little brother to help me, or washing the car, or picking up branches where we've trimmed the hedges or whatever, which can be whatever I feel to give him as a bonus: a dime, or several dollars, depending on the situation). We have a 3 part bank that has cute little buildings decorated with stickers: a bank, a church, a store. I'll divide the money up so that he can put 10% into the church (tithes), 10% into the bank (savings), and then 80% he can put in the store or whatever he wants to do (his spending money).
I take care of his needs, and also his activities that I feel are good for him as part of his childhood education (soccer, kung fu, horse riding lessons) but if he wants "extra" (a neat toy or book, or to replace something he broke, or whatever) then he buys it with his own money. He is very proud of what he buys! His first purchase was a little fishing rod and then I bought the tackle box and filled it, and he and daddy had a fishing day. (I packed a special lunch, made it a big deal). His latest purchase was a soldier playset for $20 (helmet, pistol, knife, grenade, vest, dogtags, compass, canteen) and then he had to buy a new rifle because he hit it against the fence and after warning him that it would break, he kept doing it and it broke....and what good is a soldier without a gun? He doesn't like taking his money out of his bank especially for things he already had (M. bought it) and now has to buy again. He tries to take better care of things for that reason.
I try to guide him with money---yes, this souvenier shop has lots of neat things and you want 5 things.....but pick ONE thing that is your MOST favorite of these things. But I think he REALLY got it a year and a half ago when we were out and were going to get take out. I've told this story on here before, but basically he asked for chicken so we ordered from Chicken Express but then after ordering he noticed Sonic right beside us and said he wanted a grilled cheese sandwich. I said "No, we've ordered already, this is what you wanted". He insisted he changed his mind and I said "You ASKED for this, and now it's already ordered" but then I saw it as a good teaching experience so instead of arguing with him about it when he dug his heels in, I figured the chicken could be his lunch tomorrow and took him to Sonic. I said "Ok. Here's the deal. You asked for chicken. THE FAMILY is eating chicken tonight. If you eat with THE FAMILY then you are taken care of and don't need your own money for food. If you do not want to stick with what THE FAMILY is eating, you have to pay for it yourself. This sandwich costs $2. (yes I want it).....Ok, now that is 8 quarters (yes I want it).....Ok, that is 8 DAYS OF WORK, do you understand that?" (yes I want it). I bought the sandwich and took it home. I was nice and friendly, fixed everyone's plates, but wouldn't let him eat yet until I got the bank and let him count out 8 quarters to give me. He's stubborn so he didn't say anything, but you could see he was sick over giving me those quarters while he ate, and we all happily ate our chicken. Nearly 2 years later, he has NEVER done that since! And he may look at something at the store, but he doesn't want it. Occasionally he'll say "Look at this mom" and I'll look at it. If he says "Can I have it?" I'll say if you think this is good enough to buy, you're more than welcome to buy it with your money and he will put it down and say "NO I'm just looking". Very rarely will he say "Ok, yes". (And if it's something that I think is actually cool but out of his price range, I'll say "Wow. I'll keep that in mind". I MAY pick that up for a holiday gift, a "just because" gift if he's doing really good, etc but no promises). We don't have the "gimme gimme" problems that many kids have since he has the power to do so....with his own money.
They also see us save for things. We do not talk poverty or lack in our house because it goes against our spiritual beliefs, but they know that I pack daddy's lunch because I plan menus and make food most of the time to save money. We have a large jar on the bar that we save money with, we cut coupons (nothing extreme), etc. I have him help me with shopping (broccoli or asparagus? how do they look? what's the price?) They see that everyday we make choices and some of them touch on saving money but still having a good time. (We pulled him out of part time daycare since he wasn't really learning much and was getting socialization through other activities we are in......but then we take 1/2 the money we're saving from no daycare and let him do horseback riding lessons. Things like that show him that he can do one thing, but if he sacrifices here, he can do something much cooler elsewhere).

1 mom found this helpful


answers from Chicago on

My son is still learning this. One of the "delays" in the understanding of this concept is grandma! I love her, she does wonderful things for us but sometimes she can go a little overboard. Example: we were just fine with a small notebook laptop that we were borrowing from her until we could purchase one ourselves for Christmas ... last night she asked if she could have it back she needed it for something. It's because she bought us a brand new Compaq computer!!!! When I tell him we have to be patient and wait to buy something by saving our money he just asks grandma! She tries to say no, but she is just not good at it and the poor dear has 8 of them she has trained in this manner. I am battling this, he is not as bad as the others but it will be a struggle. I knew the value of a dollar and my son will too even if I have to eventually cut grandma's purse strings.

1 mom found this helpful


answers from Norfolk on

My son gets it.
He's always been a natural saver.
His piggy bank is very well fed and the only reason he goes into it is if I need to make change (if I need small change, he loves giving me ones and fives for a twenty - it makes room for more money in his bank.

1 mom found this helpful


answers from Pittsburgh on

I don't think it is ever to early for them to learn the 'big picture' . I feel to be fiscally responsible they need to know the difference between wants and needs, what it means to pay cash vs. using credit, that you must work to earn money so that you can withdraw it from the ATM machine, and that you have a limited amount of resources that you must spend wisely.

These lessons can be reinforced by asking them to do chores and paying them an allowance. Make them spend, save, and donate a portion of those funds. Let them buy their wants with the spend funds and never let them borrow money. Explain to them that debt is best "saved" for big purchases such as a vehicle, mortgage, higher education. Let them spend all of their spending money and feel what it is like to be without. Make them understand what a rainy day fund is, why you need it, and when it is appropriate to tap it.

So yes I have taught my kids these lessons and I do believe they see the big picture. Life is so much better when the whole family is on the same page.

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