A Tool to Teach Your Kids About Money

It’s National Credit Union Youth Week – a week set aside every year for credit unions to help youth understand how they can be savings rock stars. It’s also the perfect time to remind parents how important it is for you to teach your children healthy saving and spending habits. The lessons you teach them and the way you handle money yourself are the two factors that will help determine your children’s relationship with money when they grow up. That can be a lot of pressure on parents, so here’s a tool to help you get started.

My son came home from school a few weeks ago with a note in his folder about a new program his class would be starting. It’s called Behavior Bucks. The children earn fake money for good behavior, usually a dollar at a time. They can earn extra bucks by doing extra reading, reaching certain academic milestones or being caught doing something kind for another classmate. The teacher issued each child a wallet to store their money, and they have a menu of items on which they can spend that money. A few examples are: 

• Keep your shoes off in the classroom all day – $5
• Earn a trip to the treasure box even if you get your folder signed -- $10
• Sit at the teacher’s desk for a day -- $15
• Sit by a friend all day - $23

I love this program for many reasons. First, it rewards good behavior. Second, it teaches kids to prioritize their “wants” and save accordingly. Third, it teaches them the cost of debt. If they make a bad choice in class, they have to pay the teacher from their savings. If they don’t have money to pay the teacher, they have to sit out of recess for a defined amount of time (usually five minutes) and watch their friends play.

The children have really embraced this program. Today, my son is sitting at the teacher’s desk all day. It will cost him most of his savings, but he purposely waited until he had more than he needed to cash in on this prize. He said he wanted to be sure he had money left over in case he “got caught talking again.” When the program first started, he was fined $1 on two separate occasions for talking when he wasn’t supposed to. Luckily for him, he had the money both times. Some kids aren’t that lucky, but they are learning, and that’s the whole point.

It is our job as parents to teach our kids the healthy way to handle finances, and it is never too early to start. They can count coins or play with a toy cash register. As they get older, start putting a price on good behavior or give them a chance to earn a dollar here and a quarter there, so they can buy their own things. It won’t always be easy, but they’ll thank you when their friends are in debt and they are financially independent.