Money Managment for Little Kids: The Shop.

My daughter gets allowance; she is 5. She gets allowance because she is a big contributor to the family. We settled on $3 for now.

While trying to decide on the amount of allowance to give her, I noticed a few things. Mainly that money, (U.S.A. currency), is confusing. For adults, for teenagers and especially for small children who are just mastering their numbers. First, I noticed that stores have a disappointingly fast turnover, by the time a small someone were able to save the full amount, the wished upon item would be long gone. Second, tax, here it is not added until the end of the transaction, which is difficult to explain to a small kiddo, who is just coming to terms with history. Third, all shops are extremely overstimulating, your child my want one thing but gets so caught up in all the other options that they leave with something they are later extremely unsatisfied with.

We have tried to work around all of these, letting her only save up half, just paying for the tax ourselves, or making lists and trying so hard to remember what we initially had wanted.

Not only were our solutions aggravating for everyone, they were counterproductive.

Then one day we started learning how to read and we had to practice. Practicing can be hard, it is a learned trait. So in order to get better at it, I made this:

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For every ten books we read, we would go out and buy a new book to read. It worked once. Twice. Then it got boring. It wasn’t exciting enough. Which is fine. SO, I changed things around a bit. I got together a bunch of these:

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and we painted them together.

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Then put them in a jar, in plain sight and changed the reading log rules.

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Now instead of reading ten books, we could read just five and earn a “token”. Every time the snug read a book she would get to put a sticker on one of the drawn pictures. Once a whole row of five were ‘stickered’, she could get a token. She also earns stickers by practicing other things, piano, soccer, dance, things like that.

We also made it known that tokens can be earned in different ways, through chores and thoughtfulness. In other words, through a little extra work, we created our own currency. All the tokens are worth the same, once the snug has earned 10 tokens, the shop can open.

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(I did the price list in French, since, you know, it is a “cheaper by the dozen” sort of thing to do.)

There was a lot of build up about the shop. I talked it up a ton, but it still took a couple of weeks for her to earn enough tokens for the shop to open. I stocked the shop with a bunch of miscellaneous items I had collected over time that I knew she would enjoy. Some were gifts that had been tucked too far away or things I had picked up recently.

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These were the items the first time we had in the shop.

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Everything has a “price tag” and there is the price list for translation.

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She went for the Friz and a new token box the first time. 12 tokens in all.

The next few times, she again, spent all of her tokens.

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(I only add one or two new things each time the shop is open and I only offer 5-10 items, depending on stock).

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Then something different started to happen.

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She started to relax on her purchasing and decided to save. Today she bought a new purse and saved the rest of her tokens. She has done this the past few times saving anywhere from 2 to 4 tokens.

That is very exciting. We have been doing this all summer and it has taken some follow through, but she is excited to earn more tokens, has been helping around the house more than ever and even more important, has become more relaxed about shopping. She knows, that in my shop (La Boutique De Maman) there are no sales, or gimmicks, nothing goes anywhere or is out of stock, she can take her time and wait on things she really wants. Sometimes she even will ask if the shop can be opened for browsing. Most importantly, she is learning that not all her tokens need to be spent right away.

Another benefit. It has become very fun to pay more attention to what she sincerely likes, as oppose the “heat of the flourescent light moment”. I can get these things at my own pace, when our finances allow. There are no longer arguments in stores about buying things right now or disputes about why one toy is 20 dollars more than another, though they look exactly the same. The shop has given her a real grasp on currency, in the terms of earning, spending, saving and waiting.

We will continue to do the shop at least for the next year. Then we will reassess.

In the meantime, I am upping the game a bit. I have yet to have had anything that costs over ten tokens.

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This, however, is worthy of the change.

I hope this is something that you think will help your kiddos learn about money, I will let you know in 20 years or so, if my idea was foolproof!

Happy Shopping!

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