Use these interactive money activities for kids to get your child participating in household finances (without telling them your salary) and turbo-boost their money education.
If I had to order the top three things you can do to help your child learn to manage money, it would be this:
Today, I want to talk about one method that will cover two of these three categories, and possibly even three.
It’s letting your child participate in your household’s finances through interactive money activities for kids.
And not just participate, but to contribute meaningfully to the money handling and managing in your house. The teaching money activities I'm about to share will be doing just that.
Why You Want Your Child Involved in Household Finances
By involving your child in the household finances in meaningful ways – meaning in ways where their actions can have both positive and slightly negative consequences – you’re making the subject of money much easier to teach.
Kids care more about something when they know that it’s not a dress rehearsal. When they know that what they do matters. And when they can see the results from their own decision-making.
By involving your child in some of your household finances, you’ll both allow them to actually handle money, and model good money strategy to them (because you’ll be showing them what to do and how you do it in your household).
And you know what? This process will very likely bring up a few natural money conversations, which covers Category #3 above as well.
It’s a win-win-win.
How to Involve Your Child in the Household Finances
You don’t want to throw your child into the deep-end. Chances are, you were thrown into the deep-end of managing your own finances once you moved out from your parents, and many mothers have told me that that didn’t go so well.
These are like warm-ups for one day when they’ll be in charge of managing their own household’s finances.
Let me give you 11 ways you can meaningfully include your child in your household financial management.
Money Activity #1: Let them Tip the Waiter/Waitress
I just love it when real life meets theory. When you can do the two together – both teach your child in advance + actually have them do it in real life – then you’ve got a winner of a lesson.
I want you to seize your next restaurant trip with your family (dine-in) for a teachable money moment: how and why to tip a waitress.
In fact, you can set it up so that your child either tips the waitress themselves, or decides on how much to tip them and uses your money to do so!
But before you do so? Let’s cover the theory part.
Restaurant Tipping Prep-work
You’ve likely got a little prep-work to do here to get your child ready to tip a waiter/waitress. Some are just conversations you can have, while others are little activities you can do to prep them for what they’ll do on your next restaurant trip.
Here are some suggested conversation topics to have ahead of time:
- How Waiters/Waitresses are Paid in the United States: Let’s outline a conversation you can have. “There are some professions in the United States where people are paid a very small wage by the company/restaurant itself, and make the majority of their pay based on their performance. These professions are normally in the service industry, where someone is serving something to someone else. A waiter/waitress makes very little money each hour. Under federal law, the minimum cash wage payment is $2.13/hour. Some states make employers pay more than this, but no employer can pay less.” (Pssst: it actually turns out that tipped wages must equal that of minimum wage, or the employer has to ante up to make up the difference…but you can keep things simple at this point).
- What is a Tip?: A tip (aka, gratuity) is an optional payment you make to an individual on top of the bill. The amount that you give can be based off of different factors, with the primary one being that you were given good service.
- Do you Tip Pre-Tax Amount, or Post-Tax?: You typically tip based on the pre-tax amount…but honestly, most people (myself included) forget this and just tip based off of the total amount at the bottom of the receipt. Could be a good conversation to have.
- Do you Tip on Pre-Discount Amount, or Post-Discount Amount?: Generally speaking, when you use a coupon at a restaurant, you should tip on the pre-discounted amount. Think about it – the server is putting in the same amount of work.
- Dine-In Vs. Takeout Tipping: What happens if you dine-in versus pick up an order of food – do you need to tip the pick-up? Tipping gets a little shady sometimes, so it’s good to answer these questions for your kids with an eye towards both common etiquette and your own values. The article above looks at this from various angles (fyi: it’s got some language in it, so don’t send your kiddo directly over!).
- How Do You Identify Good Vs. Bad Service?: Again, part of this is your judgement call, and what you value. Do you value and compensate for speedy service? If your order isn’t right, is it the waiter’s fault or do you not reflect this in the tip? Do you tip 20% regardless because of the low amount waiters are paid? Answer these questions for yourself before talking to your child about what you consider good versus bad service, and how you adjust your tip accordingly.
Here are some suggested activities to have them do ahead of time to make teaching money skills easier:
Compare the Average Waitress Hourly Earnings with Hourly Minimum Wage
To give your child some perspective plus understanding for why you tip a waiter/waitress, you might want to have them research what the federal (and maybe even your state’s) tipped wages minimum is versus what the federal minimum wage is.
To give you a reference point for a good money conversation, the federal tipped wage minimum is $2.13/hour, and the federal minimum wage is $7.25/hour.
Note: Again, I’d like to mention that employers have to actually make up the difference in tips + minimum tipped wage received so that waiters/waitresses receive the equivalent of the federal minimum wage. Whether or not you want to go into this level of detail is up to you and where your child’s at. If they’re ready to get a job of their own soon? Then this could be a good discussion to have.
Practice Calculating Tips on a Few Restaurant Bill Scenarios
Ideally, you would have a few old restaurant receipts to do this with. But no worries if you don’t! Just throw a few scenarios to your child and hand them a calculator.
Here’s three scenarios for you to tweak to make your own:
- Restaurant Experience #1: You and your friends go out to eat at your local restaurant. Everything goes pretty well, but you do notice that the waitress forgets to refill your drink order. She also accidentally gives you the wrong order from another table. The total bill is $43.14, before taxes. How much tip do you leave?
- Restaurant Experience #2: You and your family go out to eat for a nice, long, Saturday brunch. It’s a restaurant you don’t normally go to, and it’s actually more expensive than you guys usually spend. The service is very good, and the food is quite yummy! The total bill comes to $69.06 after tax, and $65.00 before tax. How much tip do you leave?
- Restaurant Experience #3: You and your family go to a restaurant, and your Mom has a $15-coupon she uses. The service and food are pretty good, and you guys all have a good time. The bill comes to $35.00 after the coupon is used. The total before the discount is $50.00. How much tip do you leave?
Game Time: Have them Tip
Now that you’ve done some prep-work to get your child ready to tip, it’s time to actually let them do it!
You can let your child in on the tipping process in a number of ways – choose what makes you most comfortable:
- Give them Full Control: Ready to give your child full control over the tipping of your next restaurant experience? Go for it! If the tip is too much or too little, it’s up to you whether or not you’ll fix it with the wait staff.
- Let them Decide How Much of Your Money will be Tipped: You can also let them do the decision-making and calculating for how much the tip is for, and then you leave the actual tip.
- Let them Pay for the Tip Out of their Pocket: You can let them know they get to leave the tip, but that they also must do so out of their own money.
Tools to Use for Calculating the Tip
I wanted to leave you with one final resource – a few different options to give your child for actually doing the tip calculation.
Your child can use one of the following:
- Good ‘old paper and pen
- Calculator on their smart phone (or yours)
- Have them download a free tip app to their smart phone (or yours)
Money Activity #2: Give them a Say Where Family Charitable Donations Go
You likely donate some money throughout the year, either in a formal way (say, 10% of your earnings), or on an ad-hoc basis (say, when you hear the Salvation Army bells around the holidays or see someone asking for money on the street corner).
Bring your child in on this act by allowing them to help you choose where part of the family’s money is going to go.
You’ll want to:
- Come up with an amount of money that you would like to give away to a cause.
- Decide if you want your child(ren) to have full discretion over where to donate all the money, or just part of the money. Perhaps it will be voted on by the whole family?
- Ask them what causes interest them.
- Include them in the research + brainstorming process. You’ll want to show them how to vet a charitable organization to make sure it’s a worthy one to funnel your hard-earned money through. Use a site like Charity Navigator to do this.
I’ve got a list of 9 kid-friendly charities they can donate to (“kid-friendly” because a small amount of money – under $12 – does some good with a tangible outcome your kids can latch onto).
Money Activity #3: Let them Shop for a Savings Account
I know, I know. Switching savings accounts for kids or becoming a “rate chaser” might not sound like a fun activity for YOU. But you know how you've already done lots of inconvenient things over the years − like allowing them to feed themselves with a spoon (the current phase we're in) and picking out their own interesting outfits − to teach your children important lessons?
This is just another one of those.
You want your child to be hardwired to seek out money-earning opportunities, and one way to do this is have them look for the best interest rate deal. This activity will show them why doing so is worth lots of money to them over the long run.
Because let's face the fact that − and if your kid's savings account has been collecting dust over the years, then this can't be illustrated any closer to home for you − we tend to keep what we have and not make a change. But if you were to find an account that had a 1% difference, over the years of just keeping it in the same place in the 1% higher account could make a BIG difference in the amount of money accumulated.
Step #1: Help your child to find the APY (Annual Percentage Yield) interest rate on their current savings account. This information is better than just the monthly interest rate because it takes into account compound interest when figuring out how much the bank account will earn them.
Step #2: Have your child research savings account interest rates online. If you're uncomfortable letting them into the wild west of the internet alone, help them out. They are looking for different APY, or the annual interest rate a bank is offering on their accounts. Find a good aggregate savings rate site like NerdWallet.
Step #3: Have your child calculate the potential amount of money this new interest rate could earn compared with their current account. Have them use this compound interest calculator to create each of the two scenarios off a hypothetical amount of $1,000.
- Use this compound interest calculator. Fill in $1,000 for the initial investment amount. Then $0 for the “Contribute” amount, and have them fill in the number of years left that they have until they take over the account (typically at age 18 or 21, depending on the state you live in) in Step #2. For Step #3, fill in your child's current savings account APY. In that same step, have them fill out the new interest rate they can get from their research. Finally, have them pick however often the account is compounded (hopefully monthly). Click “Calculate”.
To analyze the results, hover your mouse over the chart. You want to pay attention to the “Base Interest Rate” (what their account is earning right now), and the “Variance Above Base Interest Rate”, or what they will earn with that new account.
Subtract the total earned from the new account from the base interest rate earnings on the last point on the chart. How much would opening this new account earn them in extra interest?
Step #4: Discuss the pros and cons of switching the account based on the interest rate (if you find a higher one).
Pros and Cons Cheat Sheet:
- Does the new account have any fees the old account does not? Or vice versa?
- Is one a brick-and-mortar bank and the other an online-only bank?
- Time it takes to switch an account and re-associate any accounts back to it
- Convenience of making deposits
Step #5: Decide together if you want to switch accounts or not.
Money Activity #4: Set Up a Family Savings Goal
This has got to be one of my favorite ways to get your kids involved in household finances. Did I mention it’s also a brilliant way to model good money strategy (even if you don’t know if you’re capable of doing so)?
I’ve got an entire blog post dedicated to how to create a family savings goal, but in a nutshell, you’ll want to:
- Invite your family into the process with a family meeting.
- Together, choose a savings goal that will benefit each person of the family in some way.
- Research how much this thing/experience/event will cost.
- Brainstorm where you guys will source the money from.
- Set up a visual savings tracker in a central location.
- Spend the money to actually purchase the family goal!
Money Activity #5: Let them Source More Money
Your kids will likely love these – wait for their eyes to light up!
There are ways to source extra money from the things you already own, or from purchases you’ve already made.
Let your kids head up these two money-extraction processes:
- Scan Receipts into this App: The Fetch App pays you points that you can redeem for gift cards and cash. You won’t get rich, but it’s worth it to put your kids to work making the most out of household resources.
- Scrap Metal Cans: Your kids can be in charge of collecting all of your family’s scrap metal (cans, wire hangers, etc.) and organizing them to be taken to the scrap metal yard. Here’s an entire article about how to scrap metal for extra cash I wrote.
Money Activity #6: Let them Be the Electricity Czar
Have you ever heard of a kill-a-watt (this is the one I own)? It’s a handy-dandy gadget that let’s you measure the electricity usage of any appliance around the house (anything with a normal-looking plug).
They’re pretty fun – at least to money nerds such as myself (and probably your 10-year old).
Anyway, you can get one, and let your kid plug in each appliance to see how much electricity it uses per hour.
Once they figure that out, dig out an electricity bill, and see how much money you pay per kilowatt-hour (KWH).
Now, have them multiply the two to figure out how much one hour of use for that appliance is costing the household. Here’s detailed instructions for how to do this.
Money Activity #7: Let them Find the Cheapest Gas
Your child can make a meaningful contribution to the household – something kiddos love – by being in charge of researching which gas station has the cheapest price.
Help them sign onto GasBuddy.com and look the costs up. Let them do this once a week or once a month to see how gas prices have changed, and if another station is cheaper.
Talk to them about how many miles away the gas station is, and if it’s an acceptable distance for the amount you’ll be saving.
Money Activity #8: Give Your Child a Financial Stake in Maintaining their Belongings
I know a mom who used to be really frustrated with her son’s lackluster care + enthusiasm for his belongings. She would buy him nice gifts at Christmas and for birthdays. But what would he do?
When her son was a tween, he would give his toys away to his friends. Anyone who asked him, he’d just give them to them. She would find out weeks later that he had gifted his electronic, or video game, or Lego set to someone who had grown wise to her child’s giving nature.
Of course, this represents a different kind of “not taking care of your belongings” (and an extreme example at that).
But it does raise the issue that so many parents are facing:
How do you get your child to care about their belongings?
You know, actually maintain + put them where they belong (most) nights?
While reading the other day, I came across one man’s genius hack that aligns pretty well with natural human behavior.
It’s to give your child a financial stake in doing so.
Let’s discuss the reason why David Owen decided to do this, and how it impacted his kids.
One of the Values Owen Wanted to Teach his Children
David Owen, author of The First National Bank of Dad – an excellent read, by the way – valued teaching his children a sense of ownership over their lives. When reading his book, you can see how he does that at a very early age by allowing them almost complete autonomy over their money.
“One of the most valuable lifelong financial services that you can perform for your children, I believe, is to help them begin to think of themselves as the owners of their lives, rather than renters or squatters – in other words, to help them begin to take personal responsibility in the broadest possible sense.”
He found an opportunity to further teach this value when the popular platform, eBay, came online.
How eBay Helped Owen Discover this Genius Parenting Hack
Owen raised his kids just as eBay was making selling and purchasing things like toothbrushes from a woman in Kansas feasible.
And his son definitely took notice of this potential.
“eBay, by providing an accessible and convenient marketplace in which things like old CDs and video games have genuine monetary value, has transformed my son’s relationship to his possessions. By giving him an incentive for behaving responsibly, eBay has increased his personal sense of responsibility. That’s good!”
Once his child made the association between the “stuff” in his bedroom and being able to actually reap money from it down the road, his behavior changed.
And it was a natural change, not one his parents had to force on him.
His son handled his video games very carefully and put them away so that their resale value wouldn’t drop. He had an incentive that the parent didn’t even need to be part of. How nice is that? eBay “opened his eyes to the cash value of the junk cluttering his room. He quickly sold off a substantial portion of his private cache of old video games, unwanted CDs, and outgrown toys. His previously vague sense of the value of his possessions was transformed.”
How Can You Give Your Child a Stake in Maintaining their Belongings?
This was a really great example to show how giving ownership over to children + giving them a financial stake in their lives can change their behavior without parents having to preach or press their views onto them.
Can you do something similar in your own child's life, just like Bill did with his own son + his Apple iPhone 7 after reading this post?
While your solution might look a little different, here’s the basics of what you’ll need to solve the problem of your child not taking care of their belongings:
- An Agreement to Hand the Proceeds Over to Your Child: Will your child get 50% of the cash they make back? 100%? It doesn’t matter how much, it only matters that your child knows that this incentive exists. If you’re not comfortable handing over the money to your child, then can you agree to use the money gained towards purchasing something new that they’ll want/need in the future? You can explain to them that the more money you can get, the better the item you can afford to purchase for them.
- Education on the Resale Value of Well-Kept Items Vs. Not-So-Well-Kept-Items: You've set up the financial incentive and probably made your kid’s eyes pop out of their heads (at least a little). Now you need to show them that maintaining their belongings will bring the highest resale price. Here’s an excellent article about how to maintain value on video games. Another way you could help them understand condition of the item in direct relation to how much you’ll earn back is by pricing your used car on Kelley Blue Book. You can choose different “conditions” the car is in, and this directly affects the price you should list it. Here’s a condition quiz you go through with your child to see the true condition of your car. For electronics such as smartphones and tablets, you can use a site like Gazelle.com to get the point across (conditions are, “Broken, Good, and Flawless,” each increasing in cash you can earn back).
- A Platform for Selling Your Child Can Use: You’ll need to pick a selling platform for your child to reap back cash from their belongings when they are finished using them. For example, can your family hold a yard sale next spring or summer? Can you offer to list their items for sale on a local Facebook Mom Group (with their help)? What about trading in video games using programs like GameStop’s? Of course, eBay is still an option as well.
Money Activity #9: Let them Reap their Coupon Savings
Have you enlisted your child to help you at the grocery store yet, like I detailed in 4 Unique Grocery Store Games for Kids?
One of the ways I outlined in there to get your kid involved with helping you was to give them your grocery list ahead of time so that they can clip/print out coupons that align with things you're going to buy anyway. Then as a bonus incentive, I suggested that you supplement their allowance with any savings they reaped you.
Instead of supplementing their allowance, take the savings they reap you through specific coupons used and deposit it into savings account for kids.
You’ll need your grocery list already written out, plus a Sunday paper. Don't usually get the Sunday paper chocked full of coupons? Then have your child scour the following online coupon sites:
Mama Bear Action: Retain each of your grocery store receipts for the month. At the end of each month, sit down with your child and have them add up all of the coupon savings from each receipt.
Hint: Be sure they add up just actual coupon savings, not overall store savings!
Then either write them a check to deposit together into their savings account, or transfer the money over from your checking to their savings.
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