Teaching Money Lessons in the Real World

Your world can be your classroom when you are teaching both your younger and older children about money.

As you are going along through your day-to-day chores, running to get gas or dropping clothes off at the dry cleaners, discuss the process with your children.

Let’s start with a trip to the gas station. Since the price of gas is so high now, these money lessons may take your mind off the price on the pump and lower your blood pressure!

Show your children, both young and old, that there may be ways you can lower the cost. Many people fluctuate between using the full-service and self-serve lanes at the gas station. You may choose full service so that you can get the oil or tires checked. Or, if you’re like me, because you’re wearing white slacks and don’t want to spill gasoline on them!

Take a minute to explain the difference in price versus service at the gas station and why you use each for different reasons.

Another point at the pumps: sometimes one station will sell gas several cents below the cost at a station across the street. Show your youngster where the prices are posted and how to shop for the best price.

Also, your regular gas station may charge less if you pay with cash rather than with a credit card. Discuss with your children why it costs a business more when customers use credit cards.

With your older children, the topic of “who pays for the gas” is a valuable discussion. My suggestion is to sit down with your teen and have them figure out how many trips a week they’ll take, where they’ll go and how much gas they’ll need. If you ask them to run an errand or drop off the youngsters somewhere, let them know that you’ll pay the cost of that trip.

Decide on an amount of gas that you are willing to pay for each week. For instance, a half tank or perhaps a fill-up. Then set the rule that they must pay for any additional gas they’ll need. Help them set up “gas saving” strategies. They could carpool rides with their friends or rotate whose car they’ll use. Or, if your child is the only one with access to a car, it’s perfectly fair for them to ask their friends to chip-in and split the fuel costs.

Like the gas station, a dry cleaner offers a service that you may choose to use or not.

I personally have adopted my good friend, Bonnie’s system of deciding which services are worth utilizing and which aren’t. Bonnie is a retail consultant and her clients pay $100 an hour for her professional services. So she calculates the worth of her personal time at the same rate. When she has to decide whether to wash and iron five blouses for her workweek, she figures it on the basis of the time it would take her to finish them herself versus the cost of a dry cleaner. At $4.50 per blouse, the dry cleaner wins out.

Explain to your youngster that you might choose to send a silk blouse to the cleaners rather than wash it yourself…especially if you were pressed (no pun intended) for time. The same might be true for things like a shoeshine, a manicure or a shampoo and cut at the beauty parlor. You can instill your personal values in your children by using the marketplace as your chalkboard. There are a few buying decisions that you make that may supersede conventional wisdom and, believe it or not, this is allowed.

Usually these decisions are based on your personal convictions. For instance, do you refuse to drive anything but an American car? Or do you buy only General Foods products because you or someone in your family works for the company?

Whatever the reasons, if it strongly influences your buying decisions over all other considerations, you may want to explain your position to your children.

A good example of teaching values through buying decisions is the issue of “Made in America.” This is a subject that is growing in importance and, as trade barriers fall worldwide, will continue to be significant for many people.

If buying products made in America is important to you, discuss why with your child. The most-often cited reason is that buying foreign-made products over US-made goods – even when they are less expensive – hurts us in other ways down the road. Even for something as insignificant as a seven-dollar T-shirt, buying an import can hurt or even eliminate an American manufacturer. And that means fewer American jobs.

Try not to scare young children with too much job-loss talk. Older kids and teenagers can handle real-life economics and understand how these small decisions affect the larger community. There are other personal-choice buying decisions that may be important to you. One that’s frequently mentioned is quality. Everyone wants to buy the highest quality product they can afford. Sometimes, though, quality isn’t the overriding factor. Brand loyalty can count greatly for some people and so can price. Whatever your buying values are, share these consumer lessons with your children.

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