A Lesson our Kids Cannot 'Afford' to Miss

This post was underwritten by BMO Harris Bank, which offers a matching $25 on a new savings account opened for your child through their Helpful Steps for Parents program. Learn more at bmoharris.com/parents.

Clink! Clink!  Are your kids familiar with the sound of coins dropping one by one into the mystical darkness of their piggy bank? Are they excited to plop each coin through the tiny sliver opening atop their stoic-faced ceramic swine? Before you think you smell the scent of bacon wafting in the air, let's honestly talk about the important 'talk' we need to have with our kids: money (probably not what you were thinking, but less scary than the alternative topic).

Think about how you can start incorporating these simple concepts to your own daily teachable moments with your kids.


1. Give Reasons. We've all been there. We're at our local checkout line, kids are in tow gazing at the candy stacks. It's only minutes after lunch and hours before dinner. "I'm huuunnngggry. Can't we buy a snack?" We respond with the fail-safe, "We can't afford." The scene could easily be down the toy aisle. As easy and as effective as it is to say, "We can't afford it", it invariably is probably not really the case. It's not that you can't afford a 90-cent candy bar, it's that you CHOOSE not to buy it. Next time try giving reasons as to why you CHOOSE not to buy what they are requesting. For instance, "We won't buy that new toy because we could use the same amount of money to buy half a week's of groceries, instead." It's important kids understand there are choices to how we use our money.

2. Teach Truths. It's equally important to teach children about 'real profit'. How many of us have proudly complied to our child's request to open a lemonade stand? But, what happens when all the lemonade is gone? This is a prime opportunity to teach our children about the money terms 'gross' and 'net' profit. Each time our son opened his own lemonade stand, he counted up his money afterwards, proud of his daily take-ins. Before he was smiling all the way to the bank, we asked him a few questions. How much did the cups cost (packaging)? A bit of money is taken from the pot. How much did the lemonade mix cost (materials)? How much were the huge signs you used (marketing)? Did anyone help you sell the lemonade (labor)? We take from the pile of funds each time. There! Now, this is what you made from your lemonade stand. Our son is an expert in understanding 'net' profit and the cost of doing business.

3. Allow wants. Having wants means we have goals so use this desire to promote good traits like patience, appreciation, and learning to save. Explain to your children that they can have the toy they so desire if they save for it. This way of thinking completely changes a child's perspective of their want. First, they are forced to decide whether their desire is worth saving for or is it just a purchase on a whim. Second, if they decide it is worth it, they can watch their money grow as they save for what they want. And finally, once they have saved enough money over time, they can re-evaluate their want to really see if that desire is still strong. Their patience and delayed gratification is truly a lesson that will serve them well.

Click here to check out this great craft to help your child learn about saving, spending, and giving in a fun way and where they get to decide how to allocate their cash.




I was selected for this sponsorship by the Clever Girls Collective. To learn more about BMO Harris Bank, visit their website http://bmoharris.com/parents.