6 Ways to Use Summer Vacation to Teach Kids about Money
Summer vacation is right around the corner for thousands of Virginia kids. However, just because school is out doesn’t mean learning stops. The Virginia Society of Certified Public Accountants (VSCPA) recommends using the time off to teach valuable life lessons in personal finance — in addition to having fun, of course.
There’s an app for that
Of course there are apps to help kids learn about money through games. LearnVest.com recommends Savings Spree, a game in which kids earn virtual spending money and make decisions on spending that money. However, occasionally in the game, life events happen — just like real life — that cost them money, which offers a taste of real-world money challenges. Motion Math’s Cupcake! allows kids to act like business owners and make decisions about selling sweet treats. They determine the ingredients and the prices to charge to customers. PiggyBot is a digital piggy bank that allows kids and parents to keep track of allowances and helps kids manage how to spend their money.
Teach them that money is a finite resource
If kids learn early that money is something you need to work for, they will learn to value money more than if they constantly see their parents handing over cash or cards every time they ask for something. Even small children can earn allowances. Experts say it’s best to teach kids they need to do certain chores (like make their beds or put dirty dishes in the sink) as productive members of the household. However, giving them opportunities to earn extra money will allow them to have a say in whether they will have any extra money to do fun things, like go to a water park with friends.
Discuss vacation plans
Families generally look forward to a planned trip together, but they may not all agree on where the family goes. Bring the kids in on the decision and talk about how the vacation fund is built and how it will be spent. For example, if you line out a plan to take a trip to a theme park that’s across the country, you’ll want to include travel costs, lodging, ticket prices, meals and incidentals, like souvenirs. By allowing the kids to see how quickly things add up, you can also give them the option to vote for a few family trips to closer locations that will allow the family more fun times together. Additionally, if the family has discussed a large purchase, like a swimming pool, you can explain how a staycation will allow the family to put more money into the dream of having your own pool.
Take them grocery shopping
Few activities teach kids more about money than taking them to the grocery store. For starters, they learn there’s a budget, so there are parameters. Second, they learn that planning is crucial. Involving them in meal planning not only allows them to make healthy choices about what they eat, but it also shows them how to get the most value for the dollar because of the budget that’s already been set. This may include involving them in clipping coupons to help stay within the budget. Third, it teaches avoiding impulse buys because those usually are budget-busters.
Discuss the back-to-school budget
If you have teens or tweens who are swooning over name-brand clothes that won’t fit in your planned spending for back-to-school, then give them the option to work to earn extra money to buy the items they want. Meanwhile, visit thrift and consignment stores to show them other options.
Go over your teen’s first paycheck
Lots of teens get summer jobs and are shocked when they receive their first paycheck to learn Uncle Sam gets a piece of it, too. Discuss the difference between gross pay and net pay and explain the W-4 form filled out when starting a job determines the amount of taxes that will be taken out of the paycheck.
Turn to your local CPA
You should also explain what taxes pay for, like roads and schools. If you need help explaining taxes to your teen, turn to your CPA. He or she can offer expert guidance that will help address all your financial questions.