Tips: Teaching Kids to Earn Money

One of the kids’ favorite shows was Apple and Onion on Cartoon Network. Unfortunately, it got canceled earlier this year. Fortunately, if you have HBO Max you can stream all the episodes. It’s one of the few shows that parents will enjoy almost as much as the kids.

My oldest recently saw a set of Pokemon cards at Walmart that he just had to have. He knows the difference between needs vs. wants, but it was a strong enough want that it felt like a need. Alas, he hasn’t saved up enough allowance.

He had a solution. He would invoke the Apple and Onion episode of Tips where the characters try to perform extra tasks for a hot air balloon ride. They have one day to do it.

There are pluses and minuses to parenting a kid with a photographic memory. This is one such time.

At first, it doesn’t work well. They are a disaster at earning tips:

Eventually, they learn how to be helpful:

Earning Tips in Real Life

My son knows that I write this blog. So he said, “Hey, by reminding you about that Apple and Onion episode, I kind of helped you with your blog, right?” I responded, “Yes, that episode is an entertaining way for kids to learn how to make some extra money.” He then said, “Can I have tips?”

Yep, I gave him a tip.

I then went to look when the next new episodes are coming out and I saw that it was canceled. On Twitter, I found one of the storyboard artists put together a guide of what it was like to work on the show – complete with Apple and Onion characters.

My 8-year-old loves art and cartooning, so this was a win. I saw that he was selling a physical for $5, but he was also giving a digital copy away for free, but via Gumroad where you can… give a tip. So I put in my credit card number and sent a few dollars his way. Both my kids loved it.

It seems that I’m a lot like Apple and Onion before they learned how to earn tips. I’m a lot better at giving tips than receiving them.

What I Know About Teaching Kids Money

  • Customize Your Money Lessons – All kids are different. I have two very boys who are only 15 months apart. They learn in very different ways. This has made me realize that there is little one-size-fits-all advice for teaching kids about money. When I write an article at Kid Wealth, I hope that you process it and keep the parts that are useful to you and your family. You know your family better than anyone else. If it’s anything like mine, there is a lot of trial, error, revise, and try again cycles. That’s how learning works.
  • Actions Speak Louder than Words – Your kids are watching and learning from you. When you set a good example, you get a tremendous head start in getting kids to think positively about money.
  • Those Actions Can Cut both ways – If you have bad spending habits and it leads to money (and other) problems, kids can see the bad situation and may be motivated to avoid it. I know several adults who specifically told me, “My parents struggled with money. I didn’t want to be like that.”

    Alternatively, my kids see me being frugal and are quick to say, “Dad, you are being cheap.” They may be right. I tell them that Aruba timeshares and Disney cruises cost a lot of money, so we have to save money sometimes to be able to afford those tremendous life experiences.

  • Tools To Teach Kids Money – If there’s one article to read on the whole Kid Wealth website, this is it. I’ve summed up a number of tools such as kid money television shows and money board games.
  • I also highly suggest that you give your kids an allowance and let them make money mistakes. It’s how they’ll learn.
  • Teach Compound Interest – Kids have two awesome advantages over adults. Their brains are awesome sponges that are perfect for learning new things. They have more time for compound interest to make a huge impact in their lives. For example, a Teach Kids Investing At Any Age – The concept of compound interest goes hand-in-hand with investing. It might sound strange to teach a preschooler about investing, but it’s very possible.

One of the best resources are these money books for kids:

  • A Smart Girl’s Guide to Money – This is a great book geared towards teen girls. However, I paid my 9-year-old son a couple of dollars to read it and give me his thoughts and he said it was fine for boys too.
  • Grandpa’s Fortunate Fables – This is my favorite book for kids in elementary school and tweens. It covers about a dozen money lessons, making it a perfect foundational book. Add it to your summer reading list and have the kids read a chapter a night.

You can also look for ways to teach kids money by age:

Finally, I firmly believe in getting kids started on building a business. Here are three ideas to motivate your kids to start a business.

I realize that this article points you in a lot of different directions. I hope it’s not overwhelming. The most important thing is to pick one thing and get started. I’ll check back in another six months an update this with a lot more resources. I hope you can keep up 😉.

The title of this article is inspired by this Oprah Book. I haven’t read it, but the title stands out to me.

Four Ways to Teach Compound Interest

Teach Compound Interest
Look at the difference between compound interest and simple interest!

“My wealth has come from a combination of living in America, some lucky genes, and compound interest”
– Warren Buffett

When one of the richest people on the Earth gives actionable advice that anyone can take it’s worth listening to. He’s used the magic of compound interest better than anyone.

Here are four fun ways to teach compound interest to kids:

  1. Read A Book About Compound Interest

    My third grader did a play at school called One Grain of Rice. We had read the book earlier this year.

    One Grain of Rice is a lesson on how a grain of rice doubled every day for a month becomes a huge number – enough to bankrupt a kingdom. Substitute a penny for the grain of rice and there will be enough money to fill a mountain!

    Read my One Grain of Rice article here. It has an interactive spreadsheet, which illustrates it better than a compound interest calculator in my opinion.

  2. Give Kids Firsthand Experience

    You can read books about fixing cars or programming computers. Reading is not the same as doing.

    In The First National Bank of Dad (Review), I learned a technique where kids are given monthly interest payments on their deposits. Shorter compounding periods help kids notice the money growing faster. This creates an incentive to save more.

    For example, a 3% monthly interest rate is an annual 42% interest rate. It’s something that many parents can do because kids don’t have $100,000 of principal to break the bank.

    You may think that putting kids’ money in a traditional savings account is a great choice. However, the interest earnings are so low it will take them the rest of their lives to earn much. It’s no way to show how the rewards of compound interest are often described as the eighth wonder of the world.

  3. Watch a Video About How Compound Interest Works

    This video explains how the above works with a 10% monthly interest rate. It also illustrates how compound interest works over a lifetime:

    While the video says it is geared to grades 5-8, I think it works for grade 3 and maybe even some second graders. The multiplication at the beginning is the most difficult part, but it’s very quick and kids don’t have to follow the math exactly to get it.

  4. Take A Course
    MoneyTime is a course to teach kids about money in general. It covers much more than compound interest. MoneyTime has some gaming features like allowing kids to create their own avatar.

Teaching compound interest to kids is especially useful because they have more time to grow their money. The video above showed how much of a difference there is between an 18 and a 25-year-old saving over time. Imagine if you can start even seven years before the video’s example.

Week’s Best in Kid Money (#9)

I hope everyone had a good Independence Day weekend. Independence Day is a great time to get kids started on financial independence. It might sound silly to start so young, but a lot of it boils down to some core life skills and letting compound interest do the rest. That article has tips such as learning to cook, which is something many parents do with their kids. You may also want to read If You Made a Million.

This past week, I like the following Tweets:

  • I don’t come across Walter the Vault’s Tweets often, but whenever I do they make me smile. It’s one thing to give sound financial advice, but it’s another to do it in rhyme. Here’s a great example:

  • I love Tweets that get dozens of useful responses and this is one case.

With so many tips to read in that last Tweet, I’ll cut this post short so you can get right to it.

Teach Kids Money and Math with Monopoly

Is Monopoly useful to teach kids about money? Yes! However, I found that money is a secondary skill.

Last week, for Family Board Game Day we played Monopoly. My wife had found the Nintendo version in a yard sale for $1. (The game was in perfect condition, except that it didn’t have the instructions. They were easy enough to find online.) Instead of Boardwalk and Park Place, we worked with Mario and Luigi. It’s a classic rebranding that Hasbro has done thousands of times with Monopoly. Since my kids love Nintendo, the Monopoly version was doubly appealing to them.

At ages 8 and 9, they are the perfect age for Monopoly (Official suggestion 8+). We had played Monopoly Junior with them when they were 5 and 6, but I never liked it. Doing all the money transactions electronically didn’t feel like Monopoly. I’m much happier playing the real thing now.

monopoly teach kids money
monopoly teach kids money

Monopoly is More about Math than Money

Everyone thinks of Monopoly as a money game. It is, but I was blown away by all the math that we were doing. I’ve been using a credit card for so long that I don’t do a lot of cash transactions. We were doing all sorts of math to make change. For example, often when I had to pay a rent of $14, I’d give a $20 and my kids would have to give me $6 back. One time, I paid $102 for a $52 rent. The kid knew that I did it so that I would get a $50 bill back.

As we played longer, the math became more complex. Instead of dealing with rents under $30, the houses and hotels had us doing math with hundreds of dollars. That’s great place value practice especially now that the kids are out of school for the summer.

What About Monopoly’s Money Lessons?

It was just the kids’ first game of Monopoly. They played it very cautiously and saved their money until they landed on the premium properties. As a result, my wife and I were able to gobble up whatever properties we landed on. We had the unfair advantage of years of experience. I also had an extraordinary amount of luck the whole game.

Once most of the properties were owned, we started trading. This is where younger kids can learn the art of negotiation. My youngest son traded two of the greens for my Luigi (Park Place) to complement his Mario (Boardwalk). After the game, I explained that having three properties for other people to land on is better than two. Getting back to math for a second, this conversation dipping our toes into probability.

We didn’t get into real estate discussions like the landlord, renter relationship. We did cover how to mortgage the properties in the context of the game. However, we didn’t get into the common use of how a mortgage works because you can’t get a 30-year fixed to buy Marvin Gardens.

From a money perspective, there was still a lot going on. We were all making change all game long. We were buying assets and even selling them to other players. One of the things that’s great about money games is that it is a fun way for young children to get a basic financial education.

Final Thoughts on the Monopoly Game

For this age group, it’s hard to beat Monopoly. The worst part of the game is that it takes a very long time to play. I’ve been a little more focused on my kids’ math skills than their money management skills, but Monopoly gives us both at once. Even if you can’t find it at a yard sale for a dollar, it is still one of the best purchases you can make. You can buy Monopoly on Amazon here. I suggest teaming it with the Game of Life that covers more real-world situations such as having a career and earning a salary.

For more ideas, visit our list of best money games.

Make a “Things I Like” List for Kids

This is our “Kid Life” first article. The idea of Kid Life is to take a step back and realize that a wealthy life isn’t always about money.

School is out and summer is here. That means many kids will be home looking for things to do. We had a little break before camps start, so we did a couple of staycations. (Hence, why there have been fewer articles here lately, but we’re back and articles will be more regular now.) During those vacations, I got to reflect on all the things our kids have done. Then I realized there were still so many things that they haven’t done.

I did what comes naturally and started a spreadsheet. It was blank with a heading of “Things I’ve Done” and next to it “Enjoyment (1-10)”. I left a lot of boxes and below that, I put, “Things I Want To Do” and “Priority (1-10)”. I had to explain what priority meant, but the rest was easy for them to pick up. My 9-year-old came up with about 15 things and my 8-year-old came up with about 10. I helped with several items by throwing out anything I knew they did off the top of my head, “Karate, Snowboarding, creating comic strips, etc.”

If you were to ask me if my kids like a specific thing, I could answer you and be accurate about 90% of the time. However, it’s different to put it all on paper. That’s where you get to see what you should try to do more of. For example, my 9-year-old loved archery, but when COVID happened the classes ended and we never picked up on it again.

I took all the things they wrote and edited out the nonsense (watching TV and video games were both 10s on the “enjoyment” scale). I typed them all back into the spreadsheet, leaving plenty of room to add more. This first draft was very helpful, but I had bigger ideas. I did a Google search for “bucket list for kids” and clicked on some of the top results. Each page had about a hundred ideas of things for kids to do. Some were simple things like “roll down a hill”, which I didn’t find very useful. Others were “learn to play the piano.” It was easy to cut and paste these lists into a spreadsheet.

This is when my 9-year-old surprised me. He came up with a code for each one. A check meant that they did it and a circle meant that they haven’t done it. A plus meant that they want to do it and a minus meant that they didn’t want to do it. It was easy to see that “Swim with Dolphins” was far more popular than “Climb a mountain”.

I then asked them to take their thoughts from this and put them into the other spreadsheet. This second version is very good now. Some of the items are difficult bucket list items, but that’s okay. For example, “tour the White House” is a lot tougher than “go whale watching”. (Whale watching isn’t difficult in Rhode Island.) While I was hoping to get more skill items like “get a black belt in karate” all of these one-time experiences are useful too.

One thing that didn’t come up directly in this exercise is money. I purposely left it out. I didn’t want the kids to lose focus on what they wanted. As we start to narrow down the lists, we can talk about budgeting, planning, and saving for the things we really want.

Week’s Best in Kid Money (#8)

This week we have a small nomenclature change. Instead of the title “Week’s Best from Kid Wealth”, I’m updating it to Week’s Best in Kid Money. It’s much more accurate as my goal is to highlight what’s going on in the world of kid money. The way it was before, it sounded like I was highlighting the best articles I’ve written that week.

  • Michigan Becomes 14th State to Require Personal Finance Education

    Just last month, I wrote about Rhode Island requiring personal finance classes for high school graduation. This week, we can Michigan to the list.

    I always celebrate anything that advances children’s financial literacy. In this case, Michigan is mandating a half credit. I would prefer more, but it’s a good start. A high school curriculum is always packed, so there is always a trade-off in some other subject.

    I would highlight Michigan’s official financial literacy resource page, but it is… not great. Rhode Island financial literacy resource page is much better.

  • Baby Boomers vs Millennials

    I liked this article from Blue Tree Savings that explores how financial circumstances have changed for the two generations. When you look at just the financial differences it seems like Baby Boomers had life much better with lower educational costs, housing costs, and actual pension plans. However, as the article points out, Millennials aren’t as frugal as Baby Boomers were.

    One could probably write a book on all the differences if you include some non-financial ones. For example, Millennials haven’t had to deal with wars. Baby Boomers grew up with black and white televisions that had a few channels and Millennials can walk around with a tablet that can stream almost any kind of media that’s ever been published on demand. Not only that, but it can play video games, control gadgets around the house, and look up just about any information known in the history of the world. You can buy such a device for less than $50 from Amazon including the 8″ FIRE HD tablet available this weekend.

  • “Personal finance class should be required in high school”
    That’s the title of the Editorial Board in this Washington Post paywall article.

    It starts off with this line:

    One of the best gifts state and local lawmakers and teachers can give graduating high school students is a solid financial education.

    And it ends with this one:

    Personal finance should be as core to a high school education as Shakespeare and algebra.

    I couldn’t agree more and fortunately, this is an area where progress is being made literally almost every month.

    Now we just have to find a way to make it so that everyone has access to great articles like these and not just those who are wealthy enough to pay multiple newspaper subscriptions.

The Lemonade War (Book Review)

The Lemonade War

A couple of weeks ago, the whole family was at the local church fair, when my oldest son saw a book – The Lemonade War. He snatched it and said, “I’m getting this for my brother.” My kids often read similar books – they are 15 months apart in age. Usually, their love of books revolves around graphic novels such as Captain Underpants, Dogman, or Wimpy Kid. This was different. I HAD to figure out what it was. For 75 cents we picked up three books in the Lemonade War series with The Lemonade War being the first book (obviously).

I would soon find out that it was part of the third-grade curriculum at school. Author Jacqueline Davies somehow wrote about our family 15 years ago. Here’s her brief video trailer for the book (we’ll cover a lot more than what’s in this video):


The Lemonade War trailer from Jacqueline Davies on Vimeo.

Lemonade War Plot Summary

The Lemonade War is a story of sibling rivalry and entrepreneurial spirit. (You knew it had to be about money and business to be featured on Kid Wealth, right?) Ten-year-old Evan Treski is having a bad summer ever since he found out his younger sister, Jessie was going to skip a grade. That would put her in Evan’s class. The two siblings are 14 months apart and Evan doesn’t want to share his fourth grade with his little sister. Jessie is a math wiz and Evan can hear it now, “Evan, why can’t you do math like your little sister?”

So that’s why my oldest son, entering the fourth grade, wanted his brother to read it. They both get great grades, but there are some things that our youngest is just a natural at. It drives his older brother batty. Just like Jessie in the book, he’s just trying to live his life and do his best. Fortunately, they’ll be in separate grades, so we don’t have the problem that Evan and Jessie do.

This sibling rivalry leads the Lemonade War characters to make a bet. The person who sells the most lemonade in 5 days gets the other person’s money. The book’s fourteen chapters alternate between the two characters’ perspectives. In the battle of the lemonade stands will Jessie’s math-smart skills win? Or will Evan’s people-smart skills make him the Lemonade King?

Jessie has savvy marketing tips, while Evan has to resort to diagrams to solve math problems that Jessie could do in her head. Evan’s people skills help him get to a nearly insurmountable lead. Jessie creates a franchise model to quickly close the gap. The different approaches to the siblings’ lemonade sales make it a fun read.

The chapters start with definitions of business terms. They are named Slump, Breakup, Joint Venture, Partnership, Competition, Underselling, Location/Location/Location, Going Global, Negotiation, Malicious Mischief, A Total Loss, Waiting Period, Crisis Management, and Reconciliation. The chapters aren’t designed to teach you about the business term. It’s a fictional book that’s mostly about sibling rivalry, so it would be up to the parent or teacher to reinforce the concepts. There is The Lemonade War Teacher’s Guide, but it doesn’t focus very well on the business topics.

Perhaps the best money lessons come at the end of the book:

Ten Tips for Turning Lemons into Loot

Ironically, the kids never actually used real lemons, just cans of lemonade. Nonetheless, together they learned these ten business lessons:

  1. Location – It all starts with where you put your lemonade stand.
  2. Advertising – Make sure your lemons stand out.
  3. Underselling – Cheap! Cheaper! Cheapest lemons in town!
  4. Goodwill – How to make people love your lemons.
  5. Value-added – Giving your lemons that something extra.
  6. Business Regulations – Be sure you know your local lemon laws.
  7. Profit Margins – How to calculate the limits on your lemons.
  8. Franchises – How thirteen lemons can earn more than one.
  9. Going Mobile – Take your lemons on the road.
  10. Employee Appreciation – Don’t be a sour boss – always say thank you to your workers.

The book ends with one loose thread that isn’t resolved. That serves as the cliff hanger for the next book in the series, The Lemonade Crime. The rest of the series is The Bell Bandit, The Candy Smash, The Magic Trap, The Bridge Battle (pre-order). I’ve only read The Lemonade War so far, but in reading reviews of the other books it doesn’t seem like they help kids develop money skills. There are other things to learn in the other books, and as long as my kids are reading, I consider that a win.

Overall, the best thing about this book is that it’s an enjoyable read and the topic is perfect for the start of summer vacation. It didn’t even occur to my 9-year-old to mention it to me as a “money book” such as American Girl’s Smart Guide to Money. It’s a subtle way to sneak some extra business lessons. Add The Lemonade War to your book collection today.

The Lemonade War’s Official Book Description and Awards

I hope my review was helpful to you in figuring out if The Lemonade War is right for you or your kid. Sometimes, I find that the author’s back-cover blurb is useful.

For a full hour, he poured lemonade. The world is a thirsty place, he thought as he nearly emptied his fourth pitcher of the day. And I am the Lemonade King.

Fourth-grader Evan Treski is people-smart. He’s good at talking with people, even grownups. His younger sister, Jessie, on the other hand, is math-smart, but not especially good with people. She knows that feelings are her weakest subject. So when their lemonade war begins, there is no telling who will win – or even if their fight will ever end. Brimming with savvy marketing tips for making money at any business, definitions of business terms, charts, diagrams, and even math problems, this fresh, funny, emotionally charged novel subtly explores how arguments can escalate beyond anyone’s intent.

Awards 2009 Rhode Island Children’s Book Award, 2007 New York Public Library 100 Titles for Reading and Sharing, North Carolina Children’s Book Award 2011, 2011 Nutmeg Award (Connecticut) Check out www.lemonadewar.com for more information on The Lemonade War Series, including sequels The Lemonade Crime, The Bell Bandit, and The Candy Smash.

If You Made a Million (Book Review)

I’m on vacation, so I’m going to resurface this early article from Kid Wealth. Check back for fresh content later in the week.

Have you ever heard of If You Made a Million by David M. Schwartz? It’s illustrated by Steven Kellogg who happens to have written and illustrated one of my wife’s favorite books, The Mysterious Tadpole. My wife read it when she was a little girl. Our kids are very familiar with Alphonse.

By now you may have realized that If You Made a Million is not about helping adults understand money. It’s about helping children. But please don’t click away just yet. If there’s one thing I’ve learned over the last 2 years, it’s that adults can learn quite a bit from children’s books.

Let’s dig into what makes If You Made a Million so special. (By the way, I was not paid to write this review. I simply saw it at the library. I will however make a small commission if you purchase the book from the above link.)

If You Made a Million

Before I get started with the review, let’s get a very important number out there: 1989. That’s when If You Made a Million was written. Yes, the book is as old as Taylor Swift. It is also three years older than Your Money or Your Life, which is often considered the first FIRE book. It was also written 6 years before Suze Orman wrote her first book.

Being old doesn’t make things good. (This blog is living proof of that.) Let’s get to the actual content.

Overall, the book takes a child on a journey of earning and spending money. It starts with feeding a fish a penny, which will allow you to buy one of a shyster’s pebbles. It continues to educate children about coins with increasingly more difficult jobs and ways to spend the money. These first few pages are fairly boring, but they go quickly since there’s only a sentence or two on each page. It’s important to build that foundation.

Once you get into earning a dollar, the book tells the story of compound interest. Here’s the first one:

At ten dollars, the compound interest story gets a little more exciting:

At one thousand dollars, the idea of checks and how they work is introduced. It’s simply much easier than carrying around a wheelbarrow of coins or even a bunch of bills.

At fifty thousand dollars, we learn about how mortgages work:

There’s a little more to mortgages. Specifically, it shows how you keep giving money to the bank year after year for 40 years. The illustrations show the old man still physically bringing his check to the bank for his castle payment. It also explains that this time, you are the one paying interest to the bank.

Finally, we get to the FIRE part of the book. It only takes six sentences. The first four are:

“If you have some very expensive plans, you may have to take on a tough job that pays well.
If you think ogre-taming would be an exciting challenge, you can have fun and make a great deal of money, too.
Of course, you may not enjoy taming obstreperous ogres or building bulky bridges, or painting purple pots.
Enjoying your work is more important than money, so you should look for another job or make less expensive plans.”

Remember what I wrote before about adults learning from children’s books? That last sentence is “Exhibit A” of that.

I promised you six sentences. Here’s two more:

Did you catch the financial independence message there? Having that kind of passive income gives you the option to not work at all, but maybe you should choose the work that interests you because doing nothing could be boring.

There’s a quick concluding page after that to get children’s minds thinking about what they’d do if they made a million dollars.

Final Thoughts on If You Made a Million

I found it surprising how well the math from 1989 holds up today. The banks aren’t paying 5.25% interest like the examples. However, we often work with similar (or even larger) interest rates assuming more risk and different asset allocations.

Also, the one million number at the end might not seem like enough today. However, it is $2,034,157.94 in 2018 dollars. You’ll often see $2 million as the target number for FIRE, so the one million number from 1989 is solid.

After the story ends, there’s a significant section of “A Note from the Author.” Here you get about 1500 words on each of the themes in the book: why money, how banks work, interest and compound interest, checks and checking accounts, loans, and income tax.

Finally, there’s a huge explanation of how he calculated some of the amazing numbers used in the book. These are things like a million dollars in pennies will stack 95 miles high and a million dollars in quarters would way as much as a whale. If you love geeky math, this is fun, but you could choose to skip it and still get all the financial lessons.

I loved If You Made a Million so much that I decided to buy it. We’ve read it about every year for a few years now.

Originally published on: Jan 11, 2022 at 13:39

Week’s Best from Kid Wealth (#7)

Another week is in the books and summer is here. My kids say that I still have to wait a few days for it to be officially here, but it’s close enough for me. We’re going on a staycation for a few days to get some hiking and ocean time in. (Anything to get them away from video games for a bit.)

This week, I wanted to highlight a couple of articles. There’s this one on CNBC that explains why financial literacy is so important for kids. I loved how it divided kids into four stages and which money lessons they should learn in each.

In other news, my kids are starting to watch the Simpsons. It’s fun to go back and see the old episodes about stealing pay cable and see their clunky desktop monitors. It’s probably a little too old for them, but I’m hoping the more adult stuff will go over their heads. I’m focusing more on the humor and history. Finally, they are figuring out where I get so many one of my one-liners.

I came across an NPR podcast about The Simpsons and how their finances stack up today. The last episode of the season addresses it in some detail. If you have Hulu, it’s worth a watch with your tween or teen kids.

There’s a tremendous song about how the economy has changed since when the Simpsons first went on the air. (Not that it was realistic back then either.) It goes by fast, so you might want to read the lyrics from the transcript.