Let Your Kid Make Money Mistakes

Shark Pen
A money mistake or a good way for a kid to spend $7?

A few weeks ago, I took the kids shopping for Mother’s Day. Since they are 8 and 9 years old, it’s one of the rare times that they brought their spending money and had a chauffeur to take them around town. They did the appropriate shopping for mom, but I encouraged them to spend some of their savings on themselves. My 8-year-old bought this shark pen on the right. It was at a boutique store and it cost $7. When you “chomp” the shark’s mouth the pen tip comes out. My 9-year-old could have bought one, but it would have used all the money he brought. He knew that we are going to Dollar Tree later to buy cards for Mom, so he saved his money.

I was delighted by both of their money decisions. I certainly wouldn’t have bought a $7 pen. I personally think it was a money mistake, but I wasn’t going to talk him out it. I’m not sure what he thinks of the pen now. He brought it to school and I haven’t seen or heard of it since. It could be the “it” toy of the class. I suspect it was cool for about five minutes and then got old. When he comes home from school today, I’ll ask whether he got more enjoyment out of the $7 shark pen or the $6 Sushi Go! game that we played every night for weeks. I think I know the answer.

My 9-year-old bought a couple of items at the Dollar Tree. He got a little toy car. Unfortunately, we’re getting to the age where the dollar store toys aren’t the thrill they once were. Then he did something unexpected that surprised me. He got a box of Jell-o and said, “I want to make this with Mom for Mother’s Day.” He loves to cook and my wife loves to cook with him. It was the perfect experience gift! Plus who doesn’t love Jell-o?

He may regret the little toy car purchase a little, but his downside is minimal. In the worst case scenario he’s lost $1.25. That’s not too bad.

This was also a good time to bring up that Dollar Tree raised all its prices recently. My kids remembered when everything was just a dollar. I was able to explain that it was simply inflation just like the money conversation from a couple of weeks before.

I can read money books and they can read kid money books, but we both need hands-on experience too. We try to never underestimate the power of experience. There’s a show on Netflix called “Old Enough!” It’s been running in Japan for several decades. The show follows really young toddlers as they run errands around town for their parents. Some of these children are 2 and 3 years old. That’s not something we’ll see in the United States any time soon. The reason the kids are able to run these errands is that they’ve done them before with their parents – not just once, but many times.

That’s one of the reasons why I believe you should give your child an allowance. Everyone needs to have money before they can use it. It’s good to learn from losing a few dollars at this age. The lesson is lot more difficult later when more dollars are on the line.

* Mother’s Day cards are usually 50 cents – a much better deal than the $2.99 or $3.99 that you might pay elsewhere.

Week’s Best from Kid Wealth (#4)

The big news of the week is that I’m giving away a free teen entrepreneur course. It was developed by a certified expert and is a real live online class – not self-paced without human interaction. You still have a huge, huge chance to win, but you have to enter.

Here’s what else is going on:

  • I’ve found this super scientific white paper on financial literacy (PDF): Financial Education Matters: Testing the Effectiveness of Financial Education Across 76 Randomized Experiments. Here’s a key takeaway:

    “To put the effects into further context, our results on financial knowledge are comparable to meta-analyses studying
    the effects of math and reading education. Similarly, our results on financial behaviors are comparable to meta-
    analyses of anti-smoking interventions, tailored online health interventions and energy conservation.”

    I want to read this paper closer, but it sounds like financial education is as important as reading and math… or education to prevent/stop smoking.

  • I loved this quote from Will Rainey, author of Grandpa Fortune Fables:

  • I usually don’t listen to a lot of podcasts, but I’m putting this on my list. Why? The image that’s attached to this Tweet is AMAZING!

Parenting Tip: Making Healthy Cereal

I assume that every parent is in a rush to get the kids to school. There’s packing lunches and drinks, and getting them dressed and groomed. Like many, I don’t have a lot of time to cook breakfast. It’s not too big a deal because one of my kids doesn’t like any breakfast foods other than flat carbs (waffles and pancakes).

The obvious answer to me was cereal. It’s quick. It’s easy. The problem I had was the sugar. Sugar is expected in Frosted Flakes. It’s less expected in Raisin Bran. I looked for a lot of cereals that had lower sugar. May kids like Kix, but it is very, very expensive at my local stores.

My solution has become known as “Dad’s cereal.” I pick up Aldi brands of Cheerios, Life (Cinnamon flavor), and Cinnamon Toast Crunch. I mix those three cereals going heavier on the Cheerios and Life. The kids love the different complementary flavors. When it’s the holiday season, I add Elf (maple syrup) cereal. I’m not going to say it’s the most nutritious food around, but for us, it checks the boxes of fast, easy, cheap, and nutritious (relatively speaking).

Teach Compound Interest through One Grain of Rice

Compound interest: one grain of rice

Last week my son’s third-grade class performed a school play, One Grain of Rice. We had read the book the previous summer as I had heard it was a great book that teaches math. Just check out the Amazon Reviews – have you seen anything so highly rated?

Before I explain the story, I will warn you that this article is going to contain spoilers. If you are a parent reading this hopefully you can live with a spoiled book for elementary-age kids.

The story of One Grain of Rice is simple. A humble peasant does a good deed for the ruling figure and asks for one grain of rice doubled every day for several weeks or a few months. I generalized that because my son’s school play version had some differences from the book version. The good deed, ruler, and time of the grain of rice doubling were different.

The ruler grants the peasant’s request for the doubled grains of rice. Around 20 days he starts to regret the decision as he has to give over a million grains of rice away. Eventually, the peasant becomes the town hero with all the wealth to spread through the town.

Try One Grain of Rice On a Spreadsheet With Your Kids

I found this project with a spreadsheet. I originally found it as a great summary of the story itself, but it’s a great kid-friendly introduction to spreadsheets.

If you get used to using the spreadsheet it will be useful when you try to model one grain of rice with money:

One Grain of Rice With Money

Taking the lesson of One Grain of Rice and applying it to money isn’t a stretch. In the story, rice is essentially the kingdom’s form of currency. (It makes more sense than using bees as currency)

It would be nice if we could double our money every day, but there’s not an investment in the world that would do that. Instead, you may choose to explain that it’s reasonably possible to double your money every 6 years or so. Some parents out there might be familiar with the Rule of 72. The Rule of 72 states that money doubles every X years depending on the growth percentage. For example, if you are earning 5% interest, it will take about 14 years for your money to double – (72 divided by 5 is about 14 years). If you can earn 12% interest, it will only take 6 years for your money to double – (72 divided by 12 is about 6 years).

Assuming a 12% interest rate over the long haul may stretch reality a bit. The stock market has returned that much for long periods, but it’s far from a guarantee. It’s more of an exception than the norm. We’re looking to motivate kids with the power of investing, so you may want to focus on the sunnier side. You also may want to create your own Bank of Dad where you can afford to pay higher guaranteed interest rates (at least for a little while).

You may want to run a few scenarios with your kids. Using that “money doubles every six years” you could find that you have 5 or 6 doubling events by the time they are mom and dad’s age. By that time, a dollar invested at their age might be $32. One hundred dollars would be $3,200. You can blow their minds by going to 10 doubling events in 60 years when a dollar is worth over $1000. Of course, they might not care because it’s hard for kids to imagine a 68-year-old version of themselves.

Win a Free Teen Entrepreneur Course ($197 Value)

The Simple Startup

To celebrate six months of Kid Wealth, I’m giving away a course to teach your tween/teen how to start a business. This isn’t just any course. It’s by Rob Phelan of The Simple Startup. I’ve mentioned Rob a few times on this website. He’s the author of M is For Money and he’s the creator of the high school curriculum for The Choose Fi Foundation.

He’s a high school personal finance teacher and a Certified Financial Education Instructor by NCFE. Anyone can create a course, but very few people can say they’ve helped kids launch dozens and dozens of income-producing businesses.

If your kid has ever said, “I want that!” but didn’t have the money to buy it, this course is for them. The Simple Startup comes in two flavors. There’s a self-guided course. Then there’s the Summer Group Challenge. The Summer Group Challenge is a 6-week interactive course. It has live webinars twice a week – a great way to keep kids motivated and accountable. It also ensures that if they get stuck, they’ll have a hand. The Summer Group Challenge is normally $197, but one Kid Wealth reader will win one for free.

By the way, your odds of winning are very good since Kid Wealth is new. Also, everyone who enters will receive a consolation prize!

Enter with the widget below or click here

Week’s Best from Kid Wealth (#3)

It’s time for another week’s best. Usually, I like to highlight different happenings around the kid financial literacy space. Today, I’d like to take a deeper dive into just one aspect of kid financial literacy. It may be the most aspect.

High School Financial Literacy Courses

More and more states are requiring students have some kind of financial literacy course to graduate high school. This CNBC article suggests that Georgia and South Carolina will be requiring financial literacy soon. There are a lot of politics dividing the United States lately. One area that seems to get bipartisan agreement is kid financial literacy.

It’s almost shocking that it took everyone so long to get on board. My only thought is that everyone always knew that kid financial literacy was important – they just had other education priorities. Obviously, I’m a fan of kids learning this important skill.

I’m going to ask you to stay with me on this next one. It’s useful for everyone here in any state, even though I’m focusing on one.

Rhode Island Financial Literacy

The news of the week was actually in my neck of the woods – Rhode Island. Last June, a law was signed here to create, develop, and approve academic standards “for the instruction of consumer education in public high schools.” As part of this, schools have to create courses and require “all students demonstrate
proficiency in consumer education prior to graduating high school.”

The actually “weekly news” is that Rhode Island launched a Financial Literacy Resource Page… and it’s awesome!

For example, with the high-school literacy outline, there are links to resources that are “non-commercial, research-based, standards-aligned, and include teacher training, instructional materials, and assessments.”

It’s quite literally everything that you might ever need to teach kids financial literacy. The only thing that’s missing is that awesome teacher to make it fun and interesting. There’s nothing specific to Rhode Island in many of the resources. There’s even a financial literacy proficiency quiz. I took the demo and it isn’t easy.

What do you think? Is my Rhode Island tax money being put to good use? (I think so.) Can you take advantage of those tax dollars even if you aren’t in Rhode Island? (Quite possibly.)

Three Kid-Motivating Business-Starting Ideas

Kid Start Business Ideas

Have your kids ever come to you and said, “I want to buy a Nintendo Switch?” It may not be a Nintendo Switch, but it could be an Xbox, a new bike, or even a bunch of Roblox Robux. Sometimes an allowance isn’t enough. When kids want expensive things, this is a good time to get them interested in starting a business.

My kids are busy with every after-school activity under the sun. We haven’t jumped into starting a business yet. They are only 8 and 9 so we’ve got some time. This summer they have several day camps, but we have one week where none of the camps worked out. For that week, I’ll likely be doing some homeschooling, which will include some financial literacy and perhaps planning to start a business.

If you are looking to do the same, here are some ideas to get your kid motivated to start a business.

Bonus Idea: A couple of weeks I shared a business idea of making can tab bracelets. I got some feedback that it is a great idea.

Week’s Best from Kid Wealth (#2)

I’m back with some more of the best things I’ve seen in the news throughout the week. If you find any cool stuff that you want to share, follow @KidWealth on Twitter and tweet me those findings.

  • I want to start off with the funding of Berryville on Kickstarter. It was already funded by the time I saw it. It was easy for me to decide to back it. Gamifying financial literacy for kids makes so much sense. I was interested in being more involved, but I didn’t think it made sense to pay a lot of money to be a beta tester. I’d rather support other financial literacy projects.
  • Rob Phelan shared a story about regretting a big spending decision as a kid. It’s a great story that goes far beyond that description.

    Our kids are 8 and 9. They saved up to buy a Nintendo Switch before the pandemic and they haven’t regretted it one bit. They use their birthday money to buy a Pokemon game or expansion pack and they get a ton of use out of it. Maybe in the next couple of years, they’ll have more wants to save up for.

  • Blue Tree Savings (the author behind Grandpa’s Fortune Fables) explains tricks companies use to get us to spend more money. I second the recommendation of seeing Super Size Me 2: Holy Chicken. Also, I spent years as a pharmacy technician in high school and college without knowing that paracetamol is another name for acetaminophen. It’s a Europe thing.
  • MoneyTime won an
    Eifle Award for Children’s Education Program of the Year: Financial Responsibility & Decision Making. I’ve reviewed MoneyTime before and I highly recommend it for tweens and teens
  • Finally, I’ll end with my own tip. Buy discounted groceries with your kids. A month ago (April), I came home with highly discounted Elf cereal. Yesterday, I brought home Easter egg pasta that was $0.49/lb. I bought it because it’s fun, but also to show the value in hunting for bargains. It tastes just as good at a fraction of the price.

Have a great weekend and I’ll be back next week with new kid money tips.

Superman and Money

Superman Money

I’ve been writing tips for how to teach your kids about money for almost half a year now.

It’s time for something different.

Being a kid is tough. There are so many things to learn from A-B-Cs to 1-2-3s to Doh-Ray-Mis. I feel it’s important for money to have a role in there, but you shouldn’t overdo it. Today is a reminder to know when to roll back the money lessons and focus on what’s important.

To help us with that, I’ll present you with Superman’s Song by the Crash Test Dummies. Check out the video:

Writing this article is the first time I’ve actually seen the video. We can leave the context of Superman’s death for another time, but I wanted to focus on the lyrics and the message.

Throughout the song, the Dummies compare Superman to Tarzan. Essentially, they put down Tarzan for being a terrible hero and point out the ways that Superman is awesome. I don’t think of Tarzan as a superhero, so it’s an unfair comparison, but they make some brilliant points about Superman.


Superman never made any money
Savin’ the world from Solomon Grundy

Hey Bob, Supe had a straight job
Even though he coulda smashed through
Any bank in the United States
He had the strength but he would not

Sometimes when Supe was stoppin’ crimes
I’ll bet that he was tempted to just quit
And turn his back on man
Join Tarzan in the forest
But he stayed in the city
Kept on changin’ clothes
In dirty old phone booths ’til his work was through
Had nothin’ to do but go on home

It’s an important message to stress the ethics behind earning money. It’s an important message to stress that sometimes we do work and deal with things we don’t like because it’s the right thing to do for others.

Give it a listen with your kids and talk about it. Maybe we’ll inspire a whole generation of little Supermen and Superwomen.

Keep Those Money Conversations Going

money conversationsOn the way to school last week, my 9-year-old started an interesting conversation.

“Dad, if you had a time machine and bought a house for $1000 in 1860, it would be worth so much money today.”

Usually, it’s the parents who bring up the low cost of things. Especially nowadays with the price of gas and food going up. I responded with:

“That’s called inflation. We bought our house the year before you were born and now it’s worth double what we paid for it.”

That quote isn’t 100% accurate. I went into the real dollars we spent and the real dollars it is worth today. They are big numbers and it may be hard for him to grasp them, but there’s value in using real numbers whenever you can. That’s how kids can start to understand the cost of adult stuff.

We timed our purchase well with housing prices low after the crash in 2009 and mortgage rates to match. It’s the opposite of today’s market with high prices and rising mortgage rates. I saved that story for another day.

When I laid out the real dollars he said:

“Wow, I can’t believe our house cost that much money. It’s not a mansion!”

It’s important to note that several of his friends do live in mansions that are worth $3 million or more. I think it’s a leftover from the gilded age in Newport.

I responded:

“Mansions aren’t always so great. They look good, but they cost a lot of money to maintain. There’s a lot of space to heat, furniture to buy, and often big lawns that need a lot of mowing. If you had a mansion you may find that you spend all your time working for the house.”

Here’s how the rest of the conversation progressed:

Kid: The President must pay a lot of money to maintain the White House then.

Me: Actually, the President doesn’t pay anything to maintain it. Some of the tax money we pay goes to maintain that, along with libraries and roads.

Kid: So it’s like that Teen Titans Go episode when they got rid of the IRS but found out that the roads were terrible and the food was spoiled at restaurants.

Me: Exactly.

He had remembered the Fat Cats episode which I’ve recently added to my article of Teen Titans Go! Money Lessons.

By that time we had arrived at school. I left my 8-year-old out of the story, but he had added some parts to the conversation as well. He played a supporting role, but it didn’t add to the story. The important part is that they both participated and there was a general back and forth.

I highlight a lot of kid money books, television, and courses here, but this is a reminder to follow those up with real conversations. That’s where the magic happens.

Week’s Best from Kid Wealth (#1)

I thought I’d try something new this week. I’m sharing some of the best things I’ve seen in the news throughout the week. If you find any cool stuff that you want to share, follow KidWealth on Twitter and tweet me those findings.

Employ Your Kids

I love this idea from Rob Phelan:

I’ve tried to offer them money to do certain tasks, but they are usually in a different mental space and it doesn’t go well. I like this idea because the kid can choose to do it and it’s their idea. I might customize it to chocolate instead of money for one of my kids though. While money can buy chocolate, he lacks easy access to places where he can convert his money into chocolate.

On a similar theme, I had a chart where kids could earn a prize if they completed five tasks. The tasks were almost always a worksheet. It was a great success, but we’ve moved away from it as they have too many other things to do.

Free Money Workbook for Kids

On the topic of worksheet tasks… this caught my eye:

I didn’t wait around for TD Canada to respond. Instead, I did a little searching and found this free PDF of the Thrify and Fritter kid money workbook.

Print it and enjoy!

You Can Have Anything you Want If…

This was a really sweet message from Sammy Rabbit.

Georgia Requires Personal Finance Education for High School Graduation

Just yesterday Georgia signed into law that
high school curriculum will require students have personal finance education. This has been a huge trend in many states over the last few years. Let’s hope this continues.

Of course, if you are a Kid Wealth reader, you and/or your kid could probably teach the class.