100 Words On: A Surefire Way to Teach Kids the Value of Money

One of the more difficult jobs any parent faces is teaching their kids the value of a dollar.   Sadly, some kids never learn that money doesn’t grow on trees.

It may seem cruel, but parents who aren’t afraid to let their kids spend their money on ill-advised purchases — especially those with limited shelf lives — are actually doing them a favor.   Experience is a terrific teacher and, with respect to personal finance, it’s better they err early when the impacts are relatively benign.

The bottom line: Those “wasted” dollars are money well spent — an invaluable investment in your kids’ personal finance education.

Photo Credit: klynslis


  1. 2


    I was wondering the same thing as First Gen!

    My oldest son has definitely learned this lesson by wasting money on different ‘cards’. It is always so fun to open that new package of cards (be it baseball cards, Magic cards, whatever) to see if you get something really special. However, most of the time you end up with duds and duplicates, and regret.

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    I can cut it down to five words: Make them work for it.

    The reason many kids today don’t appreciate the value of money is because they have never had to earn it. Our generation put up lemonade stands and had paper routes. But, most kids today receive a generous allowance for doing very little.

  3. 4


    When I got my first job at 14, I spent almost every penny I made for the first 6 months. I spent the money on everything from eating out to CDs to video games, along with a whole lot in between.

    Then one day I took money out of the ATM, and realized I didn’t have very much money left. I had worked hard for 6 months and had basically nothing to show for it. That remains one of the best money lessons I’ve ever learned.

  4. 5


    I remember earning my first money at 8 years old. I worked all day and earned $2.50. I spent it on a wallet and had nothing to put in it. I guess, I will never forget that!

  5. 6


    Most children don’t appreicate the value of a dollar, because we as parents don’t want our kids to struggle. We want the best for them and in a way it spoils them.

  6. 7


    When I was a child, I had the opposite problem: I was naturally a compulsive saver. I liked the sense of security — and the sense of possibility — that came from watching my stack of cash pile up, and so I never spent money. From my allowance at age 8, to wages from my first job at McDonalds at age 15, I saved. When I was 16 or 17, I opened my first mutual fund (I asked my mom to sign onto the account as an “adult chaperone,” but opening the fund was 100% my idea.)

    I’ve learned a lot since then, namely:

    1) It’s okay to spend here and now! The $15 that it took me weeks to accumulate when I was 8 years old aren’t really making a difference in the big picture. I should have spent MORE on myself when I was young!

    2) On the other hand, thank God I started investing young! I’m way ahead of most of my friends of the same age.

    They’re contradictory lessons … but they highlight the need for balance. Don’t tip the scales too far in either direction!

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    @FirstGen: He got his brakes fixed this past weekend — peace reigns once again in the household! :-)
    @Everyday: Yes! I know kids who will buy giant boxes of hundreds of those cards and not get a single “rare” one. My heart sinks everytime I think of the money wasted…
    @Bret: You’re right, Bret. Although in my son’s case, he does work for most of his money, but he still needs a little more class time in the school of hard knocks.
    @Uproar: See! I rest my case! :-)
    @krantcents: You are one of a kind, man. LOL
    @Sonya: You’re right. I don’t enjoy seeing my kids struggle, but I think it is essential and builds character.
    @Afford: Wow, yes! Great points! I especially like #1. I still have a problem with that one myself sometimes.

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    My son and I recently had a long talk about fads – related specically to silly bandz. He had to have more and more constantly. He spent his hard earned money on them and started wearing dozens at a time around his wrists. After a few months though, nobody cares anymore. Nobody wears them and kids are now on to the next big thing. So, he wasted his money.

    Lesson learned? Fads, wasting money, hoarding large numbers of something that you only need one of? All a waste. Surely there will be more fads like this as he grows up, but it will sink in eventually.

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    Our oldest is 4 and a half, and we’re just starting to introduce him to the concepts of money. He knows that money is used to buy things, that I go to to work to make money, that coins and bills are money. It’s a pretty good start.

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    Agree. I have believed for some time now that we tend to teach our children many wrong things. One of these is that we teach them to save when actually it would have much more effect to teach them how to spend.

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