Children Can Budget Too!


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Debit cards. Credit cards. Prepaid cards. Apple pay. Google wallet. Paypal. Venmo. Bank transfers. Phone and mobile payments. Checks. Money orders. Has money taken on too many forms that the value of cash is diminishing? The idea that the next generation is losing the sense of what the true value of cash really is could very well be true. This theory is called financial abstraction, coined by Adam Carroll in a Tedx Talk.

Children can budget as well, such is the case with Heather and her daughter Ryley.

When we talk about budgeting amongst ourselves, are we also remembering to share with our children that budgeting is the responsible thing to do? Sometimes budgeting also means teaching children the value of a dollar by allowing them to learn how to manage their own bank account and income. Such is the case with Heather and Ryley! If you have been struggling with how to talk to your children about budgeting and finances, read the story below.

 This post originally was inspired by a Facebook post and I asked Heather if we could post it on my blog because I felt that the message was too important not to share! Read more about Heather’s way of teaching her daughter Ryley about budgeting to see if it also sparks unique ideas for you and your children to talk and learn more about budgeting together.

My brother recently sent me a YouTube video of a TEDx Talk about a man replacing his family’s Monopoly money with $10,000 cash to see if they would play the game differently using real money. Two out of the three children changed their game-winning strategies based on the new circumstances. His final point was simply that younger generations have no emotional connection to money, that it seems less real to them because technological advances have made physical cash-handling almost non-existent. Unfortunately, there are still very real consequences to functioning in life using what seems to be limitless “fake” money.

I remember one time when Ryley was small, she wanted something that I couldn’t afford, so I told her I didn’t have enough money. My beautiful innocent daughter replied in a very matter-of-fact way, “that’s ok, just use one of your cards!” That was the week I started taking her to make her own cash deposits into her bank account. Every birthday, holiday, or money-receiving opportunity following, we put some of it into her wallet for fun and some into her bank account. We discussed what types of big things she would like to save up for, and frequently used portions of her money in order to purchase them.

Years later, Ryley has now started babysitting for pay. We decided on a reasonable amount she would charge for her services, and some wiggle room for how much would still be worth working for if negotiations were required (aka her value). She keeps her cash and I have no stake in the money she earns. There was a high-priced item she wanted for Christmas but didn’t get, so I offered to cover a specific dollar amount against the total, and the rest would be her responsibility.

Realizing she has babysat enough evenings to purchase the item almost twice by now, I asked why we hadn’t gone to get it yet. Ryley then had to review her spending (fun foods at lunchtime instead of the free meal, movie snacks on a night out with friends, etc.) and acknowledge the importance of budgeting versus spending. We had to wait one more weekend to re-save enough money, then went to Best Buy.

It was on sale! Instead of the usual $99.95, the Sprocket price tag boasted $69.95. Great for us, since money saved means more in the pocket, or in this case the ability to purchase things that compliment the large item. I gave Ryley the option of keeping the difference, but pointed out that she might want more of the photo paper while it was also on sale (only 6.99 for 20 pieces), and she would still be spending less than the original amount. At the counter, she decided the warranty was a wise investment this time. Out the door with receipt in hand, Ryley wondered at the final cost versus the sale sign. Tax, warranty, add-on item purchase... it all adds up! And now she is left with the remaining money to begin saving for the next “want.”

About a month ago, I almost got her one of those kid-friendly credit cards. It would have been so convenient to me now that I’m not constantly carrying restaurant tips and don’t often have cash to hand her when she needs it. But there’s plenty of time for convenience in the future. First I need to help her learn the value of the actual money that comes and goes, especially since it rarely feels real anymore. I love being able to scan my Apple Watch at Starbucks or Venmo a hired musician as soon as the paper check I had to wait for clears. But I’m not doing Ryley any favors if I don’t help her learn how to be responsible for her choices. Same goes with household responsibilities, cooking from scratch, time management, commitments to others, etc.

That’s what parenting is about! I could throw her at the world at 18 and hope she doesn’t have to learn everything the hard way, become someone else’s unknowing burden, or even end up my responsibility again. Or I can attempt to build a foundation of independence and show her steps toward becoming a successful adult. Yes, she’ll still make mistakes (and boy do I constantly make them too!), but it’s still better than the alternative. Our kids need us to be their parents. They learn how to live, love, and help others by watching us. Let’s give them the best chance we can at having a bright, fruitful future in which they benefit society in some way. I’m cheering you on, yay parents, we got this! Now excuse me while I go order from postmates because I’m way too tired to cook tonight. . .

Edrina Calderon