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No Purchase Necessary: Teaching Kids Priceless Money Management Skills

Insights & Ideas Team •  August 31, 2015 | Home and Family

Parenting is one teachable moment after another. Somewhere in the midst of playground etiquette, eating habits and study skills, kids also need to learn about value: the value of time, the value of money and the value of a job well done.

What if you want to convey these lessons without cash? What are the alternatives if the idea of an allowance doesn’t appeal to you?

Parents are always discovering creative ways to teach life skills, initiative, decision-making, generosity and more—without cash. Here are ideas from two families who use practical, everyday situations to develop financial skills that will last a lifetime.

Teach Kids to Create Their Own Luxuries

Years ago, a family conversation inspired Bambi Carlson to invent a system that has helped her six children understand value, keep their rooms tidy and work and save for things they want.

“We talked about why people like to go to hotels,” said Carlson. “The beds are made. There’s no clutter sitting around.”

With her kids aware that a tidy space is a luxury worth paying for, Carlson introduced “hotel tickets.”

“If they’ve made the bed and their rooms look like a hotel—to age-appropriate abilities—I leave a ticket on their pillows,” said Carlson. Any token would work, but she uses an inexpensive roll of raffle tickets.

“Hotel tickets are easy to earn, and the kids can turn them in for things they want,” she said.

Often they cash them in for treats Mom does not normally allow: a cookie and milk for one ticket, a soda for three or an entire bottle of sparkling cider (a teenager favorite) for eight. Occasionally they trade for small items Carlson keeps in a prize box. The most patient might even save up 40 tickets to exchange for $10 cash.

Hotel tickets are a bonus for going above and beyond minimum requirements. Everyone also has daily jobs that are not tied to any reward.

“Chores are expected because you’re part of the household,” said Carlson. “We rotate jobs each week—things like setting the table and helping with meal prep, wiping the counters and sweeping the floor, and a daily swish and swipe of the kids’ bathroom.”

Today, the Carlson kids range in age from 11 to 22. Although only the two youngest strive for hotel tickets on a daily basis, even the oldest siblings still make an effort during weekend visits.

“Even my daughter’s boyfriend makes his room look like a hotel when he visits. He either uses the ticket himself or donates it to the younger ones,” said Carlson. “And friends spending the night have been talked into the fun, too.”

Encourage Meaningful Trade-offs

If your children are younger, you might take a cue from Denise Pfaucht, who finds small, in-the-moment opportunities to help her kids make spending choices based on what matters to them.

“I don’t give them money, but we talk about the best way to spend it,” said Pfaucht, whose children are 6, 8 and 10.

“Let’s say we’re out shopping and they want a stuffed animal. I tell them, ‘You can have this one, but you have to donate two or three when we get home.’”

This prompts the kids to think about what they want compared with what they have. Pfaucht talks them through the decision by asking questions like “Is this new toy worth more than what you already have?”

If a child decides to make the trade, as soon as the child is home, he or she must immediately move the cast-off toys to a bin reserved for the family’s favorite charity.

“They’re learning to make choices, and the action happens immediately,” she said.

After four years of guiding her children through such decisions, Pfaucht sees less clutter and hears fewer requests.

“My kids don’t have as many things now,” she said. “They keep the ones they love and they aren’t asking for more.”

Successful Systems Have Staying Power

Both of these family systems work—not just for a few weeks, but for years.

Carlson and Pfaucht chose simple, practical approaches they could sustain. Carlson’s hotel tickets are easy to manage and have proven relevant even beyond the teen years. Pfaucht’s on-the-spot decision making can happen any time, any place. And neither system depends on cash.

Kids don’t need money to learn about value; they need experience. The right approach for your family will help your children think about value in kid-friendly terms and then practice taking action based on their own growing sense of value. The more experience they get today, the better prepared they will be for a lifelong future of financial decision making.

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