Today my friend, Jacob from Power Over Life, is generously sharing a great way to teach kids about money and budgeting in a fun and captivating way! Thanks for sharing, Jacob!
Growing up, my parents were notorious for finding perfect moments to teach my siblings and I about money. My parents were either being great parents and really trying to teach us life lessons…or they were wanting all of us to become independent and not stay in the house past college!
No matter the intention, I remember one family night in particular where my parents gathered all of us together for a special lesson on budgeting. What ensued was a night that was very hands-on and quite creative. It wasn’t until I became a father myself before I fully appreciated my parent’s preparation and creativity at teaching us how to budget.
Your children may not thank you initially for having this special family night, but I promise they will always remember it!
So grab a pen and paper and get ready to jot down some notes on how you can personalize this strategy to make it a special night for your own children.
The Game Setup
Here are the items that you will need:
1. Monopoly Money (or some other form of pretend money)
Make sure you have the amount of paper money equal to the amount of money you make in a month.
Note: My parents used the exact amount that they earned and they told us that fact. If you aren’t comfortable with telling your kids how much you make, use a different number.
2. Blank Paper with Different “Titles” Listed on Each One
Each of these pieces of paper will represent different expenses that you have each month.
For example, if you have a mortgage with a bank, then you would write “Mr. or Mrs. Banker” and then list “mortgage” underneath the title. Another example is food…so a title could be “Walmart Associate” and then list “food” underneath.
Note: Each family is different, so your list of expenses will need to be tailored to your own circumstances. You don’t need to include every little expense, but definitely the big ones such as: mortgage/rent, grocery store, gas and car services, savings, etc
Note: My parents had about 15 or so different signs for our family night, that included the biggest expenses that the family had. They then pooled all of the little expenses into a ‘miscellaneous’ category.
Use these to pin the pieces of paper, or “titles” onto your children and one parent (the other parent will be the “money earner and bill payer”).
Depending on your family size, you may have a lot of papers pinned to each of your children and one parent. Let them pin the papers wherever they want to on their clothes.
Sit in a circle and get ready to have some fun.
The Game in Action
Once you have your paper “titles” and your children in a circle have the “money earner and bill payer” start the conversation. You will need to tailor the conversation to the age group, but it can be something like this:
“We are going to go over our monthly budget. This is the amount that we make each month (show them the fake money and tell them the amount). But we have a lot of bills to pay.”
Next, the “bill payer” starts to pay the bills, “It looks like we have to pay our mortgage, so Mr. (or Mrs.) Banker, here is our mortgage payment”. Hand over the amount equal to your rent (or a made up number).
Continue in this manner, handing out money to each of your children for each of the expenses. This is very engaging for the children, in fact, you might even get lucky and have children who like to role play their titles.
As the “bill payer” pays the last bill, make a point to mention that as a family, you always want to try and save some money at the end of the month for future events and emergencies. Specify that as a family, you are trying to put a certain amount of money away each month.
At the very end, try to make this specific point: “While we started the month with $____ of money, we only had $____ amount left over. That means that there are lots of things that we pay for to continue to have the life that we do.” (This will help them be more grateful and realize their parents really don’t have “tons” of money just sitting around).
Finally, engage each of the kids how they can help contribute to the family financially. The answers will obviously vary, and take whatever they say and commit them to it. As children feel that they are being included into the family finances, they will naturally respond and want to be a part of it.
Feel free to tailor this activity to your family and the age of kids that you have. Make it your activity. Add in your own dialogue or even show your kids your actual budget on paper or in a spreadsheet so they appreciate it a bit more.
Every age group can grasp the budgeting principles you are trying to teach.
When my parents had this family night, I learned some valuable life lessons and I believe your children will gain similar insights:
1. There isn’t a lot left over. Even though my parents made a healthy chunk of money, most of it went somewhere, so there wasn’t a lot of extra money left over. Now that I knew that, the next time they took us out to eat, or we had a big Christmas, I was a bit more grateful.
2. Money really doesn’t grow on trees. I know this is always a running joke in the financial world, but I realized that my dad’s hard work went to providing everything that I took advantage of.
3. It’s always important to have a budget out on paper. I didn’t realize how many moving parts there were to a budget. I learned that it was hard to pay everyone in a timely manner and it made sense to have something to help be organized.
I believe that your children, with proper training, can also learn the valuable skill of saving money and budgeting. As parents, it’s our duty to make sure that our children can survive financially in the world that we live in today.
If you haven’t taught your kids much about money, start with this fun family night and use it as a platform to launch into more specific areas of finance. At the very least, it’s fun and engaging!
Jacob Merkley is a full-time blogger who started in the accounting, financial, and retirement realms before switching to working online. Now he focuses on teaching others about Life Skills that put YOU in control, including the important principles of money management. He blogs over at PowerOverLife.