Money Lessons for Children

Money Lessons 2015 Black Friday Shopping

Thanksgiving is right around the corner and with this holiday comes the big day after event – Black Friday.  Black Friday is a huge shopping day for many individuals and families.  The 2015 Black Friday and holiday shopping season gives plenty of opportunities for parents to teach their children about money – including advertising tactics that strongly influence buying behavior.

While looking for deals, it is a great time to teach children about these four valuable money lessons:


Setting a budget is one of the easiest ways to save money and avoid overspending. Understanding what you are shopping for and how much you are willing, or able, to spend will help you stay on budget.  Likewise, having a budget, and sticking to it, will eliminate any regrets after you’ve finished shopping.  Many families draw names for a “secret Santa” this time of year.  This is a great time to teach children about budgets.  If the limit for the secret Santa gift is $20 then have your child come up with a list of possible gifts within that budget.  Then allow your child to go to the store and shop for the gift.  Help guide them if they get off track or want to spend more than the budget.  Don’t forget to help them factor in taxes and any other expenses associated with purchasing the gift, such as wrapping paper or a gift bag.  Helping your child understand the total cost of the gift will allow them to develop their ability to consider the total cost of a purchase.  This skill is particularly helpful when they are older and making a large purchase such as a car or house.


Marketing to children is BIG business; so big that budgets spent on advertising to children went from $100 million in 1983 to $17 billion according to Juliet Shor in her 2004 book Born to Buy: The Commercialized Child and the New Consumer Culture.  Advertisers don’t spend that kind of money unless it is making a huge difference.  If we want our children to be wise with their money then they need to be educated spenders.  The best way to combat the advertisers is to educate our children about the tactics used to influence their buying behavior.  The younger they are when we start teaching them about advertising tactics, the more educated and informed they will be when they start earning an income.

For older children, point out the key words that a retailer will use to get consumers to spend a certain amount of money.  For example, receive “20% off when you spend $50 or more”. This equates to $10 off $50, so when you purchase $50 worth of merchandise you will only spend $40.  If the budget is only $25 then help your child understand that you don’t necessarily spend $50 just to get $10 off.  Spending money they didn’t intend to spend is essentially overspending the budget by $15.  This additional $15 equates to overspending the original budget by 60%.

For younger children, you can take an ad to the store and have them look at the pictures in the ad and ask them if the picture in the ad looks like the item in real life.  By pointing out differences between what is advertised and reality you are teaching them to be skeptical of the advertisements.  You are teaching them to think about the advertiser’s true value proposition before buying.


Doing your research ahead of time can help you save both time and money.  Sometimes what seems like a deal is really just a play on the numbers.  Make sure you know what the “normal” price is and then compare that to the “promotional” price.  Even better is enlisting the help of your children.  By getting your children involved you can teach them how to make educated purchasing decisions which also teaches them not to be impulse shoppers.  Help them work through the rational of why something is or is not a good deal.

Ways to Pay:

There are many different ways to pay for merchandise these days.  Determine which method you will use and then discuss the differences in payment methods with your child.  You can have the conversation before, during, or after the purchase.  Just be sure to call their attention to the method you have chosen and then discuss the differences between paying with cash, check, debit card, and credit card.  Children are much savvier then we give them credit for and explaining the differences in payment methods can start as young as 4 or 5.  Make sure you use appropriate language that they can understand.  Think about linking certain aspects of payments to items that they can relate to.  For example, a piggy bank at home can serve as a good example for a bank account at a bank.

Financial literacy and understanding is essential to an individual’s well-being.  Money can be a source of security or insecurity for most adults.  By breaking down barriers and helping our children understand money basics we are in essence giving them a lifelong gift.  We, as parents, are giving our children the gift to, one day, be self sufficient and confident in their ability to make wise and informed money decisions.  If it seems difficult or awkward just remember this – your years of experience provide you a great deal of knowledge about this subject.  If your child asks a question that you don’t know the answer to then just say, “That’s a great question.  I don’t know the answer to it right at this moment. Let’s try and find the answer together.”


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