Mother’s Day was coming. Each of the kids had $10 to buy a gift for their mom.

Jack, 7, ran down the stairs with his computer.

“Look Dad. This is what I’ll get Mom for Mother’s Day.”

He pointed at a hot tub on the screen.

“She really wants this.”

His dad smiled.

“Yes. I’m sure she does.”

Jack didn’t understand why $10 wouldn’t buy his mom the hot tub she wanted.

Another family was in a furniture store. It was the mid-1980s and the father was buying the mother her first dishwasher.

The salesman explained the differences between the dishwashers on the sales floor. He pointed at a price tag.

“This one is $399,” he said.

The middle daughter, 9, looked at her mother.

“That’s a good price, Mom. It’s only $3.99! I could buy that with my allowance!”

Learning the concept of money and its ability to purchase a pack of gum versus a hot tub or a dishwasher is a life skill.

There are ways to introduce the value of money to your children.

Earl Pickard is an investment advisor with Pickard Financial Management Group and a father of three boys.

Needs vs Wants

Children can learn the difference between a need and a want, he said.

“For our own children, who play various sports, we pay for what we consider the basic equipment, and they pay for the surplus. So, if we feel a hockey stick should cost $80 and they want the $130 hockey stick, they pay the $50,” Pickard said.

That means they must earn the money or save it from allowances and gifts such as birthday money.

Youth Bank Account

Pickard recommends setting up a youth bank account for each child. These have parental oversight. The kids have a convenience card, and the parents can keep track of how they are spending their money.

“I think that’s as safe as anything. I can look at it, as opposed to if they had $50 in their wallet and I have no idea where it went,” he said.

Allowance

An allowance teaches children that if they want something, they must budget and save for it.

“We’ve always paid an allowance. Our general rule was $1 a year,” he said.

So, a 10-year-old gets a $10 allowance each week, he said. As they get older, they have more responsibilities around the house, so they get a bigger allowance.

Don’ts

Parents shouldn’t talk about money in front of the kids. It can create a lot of anxiety, he said.

Don’t say, “We can’t afford that.” Instead say, “It’s not something we want to spend our money on right now.” Or “This is more of a want than a need and we’re not going to spend money on it right now.”

And parents must be on the same page. Children need consistency, Pickard said.

“It’s not fair to the kids to get mixed messages.”

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