Poor Kids Today

Have you ever wondered how the children of today are ever going to understand the value of a dollar? Think about it. When is the last time you ever paid cash for an item in front of your child? Heck, our children don’t even know what lunch money is anymore.  They just get in line, pick up their food, and tell the cashier a student ID number.  When he sits down to eat, Jimmy has no idea how much his lunch costs, or how long he would have to work to afford that meal.


How does your child/grandchild pay for music or video games?  How does he pay at Chik-fil-a?  Does she know how much her parents spend for club soccer or piano lessons every month? If you asked how much the average person makes in a year, would they have any idea?


As parents and grandparents, we have the privilege and responsibility to teach the next generation sound financial principles. But, what’s the best way to teach these lessons?  There is no shortage of advice on the subject, but a quick search on the internet will leave you as confused about best practices as when you started. Perhaps the best way is to simply have short, but frequent conversations with your children about money as it relates to their everyday lives.


Here are just a few examples to get you started:


  • A child frequently asks you to buy them clothes/games/whatever. Instead of just saying “yes” or “no”, try asking if they know how much the item costs.  If not, make them research the cost.  Then ask what they would be willing to do around the house or yard in exchange for the desired purchase. Then compare an hour of “child labor” (which may be worth $5 hour or less) to the cost of the item. How many hours of work will it take to afford this thing you want? Do you still want it?


  • A mother is trying to help her child understand the concept of compound interest. She asks him, “If I could give you a million dollars today, or a penny today, which would you choose?” The boy gives his mother a strange look, but decides to play along and chooses the obvious answer. The mother then says, “What if you had to choose between waiting a month to receive $1,000,000, or receiving one penny today that doubles every day for 31 days?” With growing curiosity, he again chooses the $1,000,000, but also begins to think that his mom just might be playing him. Imagine the look on his face when she shows him this video!


  • A father came home from work one day and dropped a large suitcase on the kitchen table. He told his children to sit down, and he opened the case. Inside were 10,000 one-dollar bills, his entire monthly salary. After the initial shock and assuring his wife that no bank had been robbed, he made the kids count out all the money and place it in piles representing the family’s monthly budget—taxes, mortgage, utilities, groceries, etc.—until every single dollar had been allotted. The children were amazed by how much money went to taxes and other fixed costs, and how little was left over for discretionary spending. It was probably one of the best financial lessons he ever taught them. They certainly never forgot it.


So, the moral of the story is that personal finance doesn’t have to be boring. Be creative. Have fun. But most importantly, be intentional about having conversations with your kids about money—early and often. It truly is the gift that keeps on giving.