A $10 Gift Card? A Coupon Teaching Moment

"Dad, look, here's a $10 gift card to Toys R Us. Can we go?"

"Well, honey, that's not really a $10 coupon. It's $10 off if we spend $75. We would have to spend $75 in order to save $10."

"Ok. Let's go."

The world of children is often described as very black and white (I want this and if I don't get it, I am going to die), but it's the nuances of gray that most often challenge us as parents. Some coupons are good, some coupons are not so good - white and a slightly grayish-black. Our neighbor gave our 6-year-old a coupon organizer filled with various coupons that would seem to both of them to be a very noble gift.

I will say this - it led to a teaching moment. We were able to explain to our daughter that a coupon for something you intended to buy or something you actually needed is an excellent way to save money. Because she now somewhat grasps the basic idea of marketing and advertising - to get people to spend money - we explained to her that the coupon she thought was a gift card, "$10 off if you spend $75 at Toys R Us," was really just an invitation to spend $65 or more dollars. Granted, money spent at Toys R Us would likely yield something she wanted, but we were able to turn the conversation back to her Save jar. Because she's currently saving for a $79 item (one of those folding chair/bed combos), and she was aware of how much time that was taking her, we were able to explain the purpose of that coupon a little easier.

Teaching moments are terrific and the more context you can provide for your child, the more relatable to her experiences, the more valuable it will be. This lesson certainly doesn't mean she wouldn't love to go on a $65 shopping spree at Toys R Us (she would...heck, I would), but it does help her to understand the concept that the money spigot must be turned off regularly in order for it to provide money when it's turned on.

Oh, and we're going to go use a 40% coupon at Aaron Brothers to get some canvases we planned on buying for an art project this afternoon. Teaching moments rule.

Just Add Kids

We are really fortunate. Our Money Mammals teaching guide, for kids 1-2, just won the Oregon State Desjardins award for leadership in youth financial literacy, courtesy of Rogue Federal Credit Union and Kerrie Davis. Thanks, Kerrie! I also happened to be using the teaching guide this week in my daughter's K-2 class at Larchmont Charter Schools here in Los Angeles, California. The guide provided a nice framework for a "Share" (charitable giving) lesson tied to the school's Thanksgiving food (and money) drive. I brought in some jars and the kids decorated them with fun Share labels and Goal labels for the amount they planned to save over the two weeks until the Thanksgiving drive ended. I enhanced the lesson with video from my show.

The kids really enjoyed setting the goals and I just know that they will do an incredible job bringing in food and money for the needy. The take-home lesson for me was that, once again, you just need a good framework and just add kids. The kids are ready to learn about many aspects of financial literacy at a young age (five and six in this case) and they make any lesson so much more than you could have imagined prior to going into the classroom.

Share YOUR Insights with Marketplace Money

The good folks at American Public Media's Marketplace Money are planning a show focused on kids and money and they want to know how you teach your kids about money. You can check out the questions here, http://bit.ly/1mCR7H. Fill out the questionnaire and share your insights on kids and money.

Stunning Stats & the Solution!

Here are some stunning stats to think about regarding financial literacy:

-62% expect of college graduates will have a student loan debt averaging $27,236 (Student Monitor)

-Only 11% of workers under 35 years of age indicate they are participating in their company's 401(k). (American Institute of Certified Public Accountants)

-40% will never gain a net worth in excess of $10,000 (American Dream Education Campaign)

-In most cases, economics and personal financial literacy programs are elective classes so “only 12% of Americans graduate from high school having learned anything about money at all.” (FoxNews.com)

-Less than one-quarter of students and only 20% of parents say students are very well prepared to deal with the financial challenges that await them after graduation. (KeyBank)

We spend so much time trying to fix bad habits in teens, young adults and adults. It's not working! When are we going to realize that the lion's share of our focus must be on the children. We must be good habits in our young children.

Still don't believe me? Please read this.

-John

6 Great Youth Financial Literacy Links

These are some of the top resources that I've found that can help you teach your kids about the value of money:

Allowance Magic - Short, simple authoritative allowance system. Full disclosure - We sell this book on our site, www.themoneymammals.com.

Thrive By Five - What can kids learn about money BEFORE they enter kindergarten? A lot!

Early Childhood Financial Literacy - Great study about the importance of teaching kids and building good money habits young.

Frugal Dad - This Dad is on a mission. Join him.

First National Bank of Dad - I LOVED David Owen's book. His wit and wisdom can help you teach your kids about money. Incredibly well written.

The Money Mammals (www.themoneymammals.com) - Full disclosure - I created this DVD. Like Frugal Dad, I'm on a mission to teach kids about the value of money and I believe it's important to make the process fun. Our DVD is a family affair - my wife and I came up with the concept to teach our kids about the value of money, I wrote the script and my brother wrote the songs. Your kids or grandkids will love the DVD and they'll learn something in the process. If they don't, holler at me (john@themoneymammals.com) and we'll give your money back.

Let me know what you think and post YOUR favorite resources.

Don't Forget the Family

Times may be tough, but whatever you do, please don't lose your focus on the family. I know I posted on this recently, but it bears repeating because I've seen and talked to so many families under stress trying to shield their kids from the burdens they are facing. This is EXACTLY the time to enlist your family in the effort to help work things out. Your kids are going to "feel" any stress that you may be feeling, whether you talk to them directly or not. So talk to them, reassure them, let them know that you are working hard to make sure that everything is going to work out, no matter how bad things may seem.

Make them a part of the process, "we need to conserve, kids, so please don't run the faucet when you're brushing your teeth, pour only enough milk into your cereal bowl and please only flush once." They will want to help. Let them.

-John

Share - Charitable Giving For Kids

The least utilized used bank in my daughter's Share / Save / Spend Smart bank set is that pesky Share (charitable giving) one.  I say pesky because we need to provide here more guidance.  We require that she put $1 of her $4 allowance dollars (she's 6) in Share and she did give to a Leukemia society last year, but I think it's time to bring the goal-setting ideas we use for the Save bank (which have worked) to the Share bank as well.  I thought this article on eHow was very helpful in giving us a framework to create a better Share program.

-John