Don’t Be Afraid to Let Your Child Feel Some Financial Consequences

Teaching money to kids? It's OKAY to let them feel some money consequences. In fact, it could be their greatest source of learning. #teachablemoments #learning #quotes #kids | https://www.moneyprodigy.com/teaching-money-to-kids-let-them-feel-consequences/

When teaching money to kids, don't be afraid to let them feel some financial consequences. You'd be amazed at the lessons they'll learn that cost a lot less now!

When I look back on the journals that I’ve kept since kindergarten {some in crayon scribbles}, I’m reminded of how far I’ve come in my money journey.

Sneak Peek: One of my most favorite entries is this really funny, dramatic essay where I moan about having to ‘drain’ $13.00 from my account each week for gas (oh, the look of horror in my 16-year-old eyes at what our current monthly gas bill is)…

Yes, I’ve financially matured since then.

But it didn’t happen overnight.

If I travel back through time, I can think of several mistakes I made with concrete (read: savings account-draining) consequences.

At the time, they were really painful {financially} to go through. Especially since I was earning my money mainly through mucking horse stalls, milking cows, and other forms of exhausting, smelly work (I grew up on a dairy farm!).

But boy am I glad I learned them when I did compared with learning them as an adult…because when you’re an adult, small mistakes can have much costlier consequences (and, potentially, even be irreversible).

Lesson #1: There are Financial Consequences to Not Taking Care of Your Belongings

Flip back in time. The year is 1999, and I am a drummer in our high school marching band. I manage to lose my marching band tunic. It could have happened at any of the parades we went to, or perhaps on a bus to/from the event (to this day it’s never shown up in my belongings). I dreaded each and every event we had thereafter because I had to ask to borrow one from the band moms, explaining yet again that I still could not find it. Then, the end of the year came. I signed over $385 to the band fund to make up for my mistake. Ouch.

Flash Forward: I honestly don’t think I’ve lost anything of large value (or perhaps even of ‘small value’) since that band tunic. I am organized, and keep my belongings in good working order because I’ve realized how costly it is to replace them.

Lesson #2: Some Deals are Too Good to Be True

I was one of those teenagers who desperately wanted some CDs of my favorite music, but just couldn’t afford to purchase them all. One day I found a deal in the mail from BMG (remember those guys?). It was something extremely tempting, like 5 CDs for $25. My mother gave me fair warning the first time I approached her with this unbelievable deal, but still dutifully sent in each check I gave her when I didn’t want to listen. Then one day, it dawned on me. Since you had to become a member of the club and buy a certain number of CDs over the next year or so, it turned out that in the end, you really paid just as much for those CDs as you would have in the store. Except you spaced out the purchases. Doh!

Flash Forward: I excel at finding great deals. By learning all those years ago to sit down and do the math before signing up for an offer that sounds too-good-to-be-true, I’ve developed quite the system for quickly sifting through fool’s gold to get at the real thing.

Lesson #3: Sometimes You’ve Got to Cut Your Losses and Move on

One night my father offered me $20 to milk the cows. I decided that I would do it because I really wanted this new jean skirt from a catalogue (ordering from a catalogue was something I rarely did, so this was a special treat). So, I spent the two hours or so sweating it out in our barn, milking all of our cows, and showering off the manure smell right before settling into my homework. The next day I placed my order. But the skirt didn’t come. Three weeks passed, then four weeks, then I just about forgot about it. Until a letter came in the mail letting me know that this company had declared bankruptcy. Yikes! All that work for nothing.

Flash Forward: This is one of the hardest lessons I’ve had to learn, and honestly, I need a tune-up every so often. Things do not always pan out in this world. When I sink tons of time and energy into a losing battle, it’s important to cut my losses and move on before investing even more time, energy and money into something.

I’m sharing this with you so that hopefully, as you continue finding those teachable moments with your kids, you can feel more confident and steady when allowing your child to feel their own financial mistakes. Because guess what? My parents did not bail me out of any of these situations. Because of that, I learned some pretty valuable lessons.

Learning these lessons when the consequences were relatively minor, and when I had my entire life to reap the benefits, really changed the course of my money future.

It's your turn. Share with us a financial mistake and consequence you let your child work through. Has it changed their thinking yet?

Don’t Feel “Qualified” to Teach Your Kid about Money? Read this.

Do you get queasy when thinking about teaching kids about money? You're not alone. Let me show you why you're qualified, and how to get started. #teachablemoments #learning #quotes #kids #parentingtips #parentinghacks #parenting| https://www.moneyprodigy.com/teaching-kids-about-money-dont-feel-qualified/

Teaching kids about money leave you queasy in your belly? I'm here to tell you that you are QUALIFIED to teach your child about money, no matter what your situation has looked like up until now.

Teaching kids about money: you are fully qualified to teach your child about money — I've waved my magic wand, and it is done.

Yes, I’m talking to YOU.

The one who thinks since they only JUST got their own money together enough to feel semi-responsible, that they can’t possibly be qualified to teach their own child.

Hi, I’m Amanda L. Grossman from MoneyProdigy.com where I teach kids all about money. And today I want to show you precisely why you are fully qualified and capable of teaching your child about money.

What qualifies you to teach your child about money through ways like teachable moments at home, you ask?

I’ll give you three teaching kids about money qualifications, and see if you can pass them:

Qualification #1: You’ve made a money mistake.

Money mistakes are material!

These are golden opportunities when teaching your child aobut money, not something to be ashamed by.

Take a few minutes to remember the mistake that you made, the details involved, and the lesson you learned from it.

When put in that same situation in the future, how did it go the second time-round?

Examples (nah…I didn’t make these at all…):

  • Opening up a new checking account and closing the other one, only to have several automatic bill-pays bounce.
  • Graduating college with a huge debt monkey on your back. Sure, you knew you'd be in debt. But $36,000?!?
  • Missing a mortgage payment.
  • Getting a letter from the IRS.

Use these nuggets and show your child that a) you’re human, and all humans make mistakes, and b) it’s okay when THEY make money mistakes, as there’s a way to work out of them.

Pssst: Want more on how really successful money people have made huge blunders – think bankruptcy, 401(k) cash outs, and $250,000+ in credit card debts? Then check out my post on how to turn your biggest money mistakes into assets here.

Qualification #2: You’ve been in the banking system for any number of years.

You know how to make a transaction (at least I would hope so, at this point), and you know the difference between a debit purchase, a credit purchase, and cash. You’ve got a checking account, you’ve got savings, and you know the difference between the two.

Got a retirement account set up at work? Bonus points.

Walk your child through each of these accounts, and each of these ways to pay for things and you’ll have given them more information than they’re likely to receive in personal finance education at school.

Qualification #3: You care.

Seriously. In a world where 69% of parents are reluctant to even talk about the subject of money with their kids, just showing up and opening up dialogue about the subject will put your child ahead of the pack.

You are reading this article, so you obviously want better for your child than you had (qualification #3 met!). You’re taking the right steps to get there, and by clicking through content here, you’ll find lots of resources to partner with you on your quest for your child’s bright money future.

You’ve GOT this!

Pssst: still feeling a little unqualified in the money realm? Here are 5 personal finance books that, once you read, are like getting your Money GED.

Hate that Your Kid Spends their Money Frivolously? Do this.

Checking out money jars for kids? That "spend" jar doesn't exactly come with a spending money wisely lesson. And this doesn't come naturally to most of us. Let me show you a 40-part method to teach your kid how to spend their money. #moneyjarsforkids #DIY #kids #kidsandmoney | https://www.moneyprodigy.com/spending-money-wisely-for-kids/Spending money wisely is a learned behavior for most of us. I'm going to teach you a 4-part method that your child can take with them into adulthood to maximize all their purchase decisions.

It can be SO frustrating watching your kid raid their money jars for kids and not spending money wisely, just to waste it all AGAIN on something you know darn well they’re not going to use past next week.

Yet we all know that living these lessons out now with just a little bit of money and no creditors breathing down their neck is much better than the alternative – learning the lesson the hard knocks way that we all had to.

So, how can you get your child to continue controlling their money, but in a way that is a bit less aggravating to you?

Hi, I’m Amanda L. Grossman from MoneyProdigy.com where I teach kids about money through money educational adventures.

Today I want to share with you the ONE money lesson that has the potential to not only curb some of your child’s spending habits today, but that will serve them throughout the rest of their lives because they will truly value money in a much deeper way than most people have figured out how to do.

Hint: I only was told about this in my 20s and it changed my world. Imagine what it can do for your child since they haven't even gotten their first paycheck from a job-job! 

The next time your child wants to spend their money on something you consider frivolous (hello, stuffed animal #677!), don’t lose your cool.

Instead, help them to spend money wisely by doing this:

Step #1: Give them Control

Tell them that they can have it, and will need to pay for it themselves. Offer to help them in making their final decision using the next steps.

Step #2: Help them Research the Cost of the Item

Help your child research how much the item they want costs. You could use Amazon.com, go to a physical store, or peruse a catalogue of some sort.

Step #3: Help them Calculate How Long it Will Take to Pay for It

Your child needs to understand how long they must work to get this item, or how many allowance cycles they need to wait to get it.

Whichever one you use all depends on how you give them money – either through an allowance, chore commissions, etc.

Help them calculate how many chores they’ll need to complete in order to pay for this item. Is it two weeks of vacuuming and emptying the dishwasher? Is that emptying the trash out 8 times, or 15? How many floors do they need to mop?

They need to see the work value of this item they’re considering, and whether or not they still consider it to be worth it after figuring this out.

Pssst: Don’t give them an allowance? That’s fine. You’ll want to use Step #4 below.

Step #4: Help them Answer the Question, “What Else Could I Buy with That?”

By your child purchasing this item, they’re giving up purchasing other items. This is called a trade-off. But they might not know that they’re doing that, so this exercise is going to help them identify trade-offs to give new value to their money.

Go back to how much this item is going to cost. Have your child list out 5-10 things they can purchase with this money instead.

Hint: the idea here is that, they can't have everything on this list. They can only pick and choose what's best for them. This is called a trade-off, and they're making one every time they buy something (they just probably don't know it). 

If they’re still willing to use their money for this item after figuring out how much they have to work for it, or how long they have to wait for it, then so be it. They must really want it, and going through this exercise makes that purchase non-frivolous now, anyway, as it’s passing on a valuable money lesson! Either way, spending money wisely will easier for your child once they go through this process a few times.

The 1-Page Money Goal Setting Worksheet for Your Kiddo

This 1-page goal setting worksheet for kids will get your child to choose the BEST money goal for themselves – meaning the one they're most likely to stick with.

Kids have many competing desires in life (which is why they need a goal setting worksheet for kids).

They want All. The. Things.

And they want them now, amiright?

Like…

:: the newest video games
:: to go to the arcade
:: a snowboard like Shaun White’s
:: a white guitar with a skull like Pixar’s character Coco

It’s endless (not that I have to tell YOU that!)

And that probably sounds familiar, right Mama Bear? Because you and I have endless wants as well.

How can you help your kiddo narrow down their wants and desires so that they’ll have one savings goal to stick with to learn money lessons from?

I’m Amanda L. Grossman from MoneyProdigy.com where I teach kids about money, and today I’m going to give you 3 tips on how to help your child pick just ONE savings goal to work on.

Goal Setting for Kids Tip #1: Don’t Tell Them No

What child – or even adult, for that matter – wants to hear “no” when they tell you what they want?

None.

Of course, they can’t have everything that they want (and I would never advise that, anyway!).

But for now, don’t tell them “no.” Instead, you’re going to tell them this:

You can have everything that you want in life, you just can’t have it all at the same time.

Goal Setting Action Step: Help them brainstorm every single want they possibly have, and get them to write them all down on a piece of paper.

Goal Setting for Kids Tip #2: Go for the Quickest Win

Your child needs to see that the process of setting a goal to save for and then to actually purchase – whether it’s something they want to be, do, or have – actually works.

If they see that it happens successfully one time, then they'll be more enthusiastic about trying it out again.

You'll need to eliminate as many kinks in this chain as possible for this to happen.

So, you want to steer their first savings goal towards the quickest win.

Goal Setting Action Step: To do this, use my Savings Goal Matrix. You’ll guide your child to fill in all of the wants they just wrote down according to how long each will take to save for, and how important it is for them to buy it.

Goal Setting for Kids Tip #3: Help Them to See the Light at the End of the Tunnel

The beginning of their savings goal journey – after the initial excitement from it all – is going to be a tough one. It’s partly because your child doesn’t have the experience of achieving savings goals to know that there is a happy ending to this whole thing.

I mean, can you imagine just jumping into the car and driving off to the beach without knowing whether it’ll take you 2 hours or 2 weeks to get there?

You’d probably give up because of lack of confidence.

So, you need to help them see the light at the end of the tunnel.

Goal Setting Action Step: You want to come up with an estimate date for how long it will take them to save for this item so that they know the sweet reward is coming. If they get an allowance, then you can talk to your kid about what amount they’ll want to set aside for their savings goal. Once you know an estimate amount they can set aside each week towards it, you can calculate out how many weeks or months it will take for them to reach it.

Remember that today your kiddo might be saving for the newest video game, or a pair of sneakers all their friends have. But do this right? And eventually, they’ll be setting the kind of goals that make a real difference – like a down payment for their first home, or enough to max out their Roth IRA retirement accounts each year.

Pssst: Now that you've gone through the goal setting for kids activity and they've got a savings goal, you'll want to check out my 57 Action Steps to get Your Kid to Save More Money to help them actually reach it.

I’ve been looking for a goal setting worksheet for kids that will help my child set goals (it’s so hard to get them to set just ONE goal). I love how this one is one page, and works for kids goal setting, goals setting for teens, and even can give us some help with family goals. This woman shows how goal setting also ties into a money education for your kid – bonus points. One of my favorite goal setting activities for kids, and will help with a growth mindset. #goals #familygoals #kids