When Kids Manage Their Own Money


Teaching kids about money has been a challenge in these modern times.  Kids don’t see mom and dad pull out cash for things other than vending machines.  It is almost like money is no longer tangible.

When Kids Manage Their Own Money - Kids Activities Blog

In an effort to teach my kids in a hands-on way about money management, we started them with a small weekly allowance.  They received their age in dollars each week with one dollar going to saving and one to charity.  That left their age – $2 each week for wild spending sprees.

I really tried to let them decide how to spend THEIR money.  It was hard sometimes to see them spend it on ridiculous stuff, but I figured it was better for them to learn that lesson over a few dollars than later in life when the stakes are higher.

It was all going fine until…well, let me tell you the story.

When Kids Manage Their Own Money

Our home economy is not unlike that of major countries. Those in charge met for a financial summit to determine the outcome of the poorest citizens. After much negotiation, it was decided that a welfare system of allowances would be enacted. Reid (5) was to receive $2/week and Ryan (7) was to receive $3 per week.

The new economic policies benefited me the most. My recorded message at the store was  no longer “no”. I would just state what items  were  eligible for reimbursement from the home government and what would  be the responsibility of its citizens.

Ryan soon became a bank.  He was a fortress of savings and loaning! He also became involved in all purchase negotiations – no matter whose money was involved.  The Bank of Ryan believed that he always knew what was best. The Bank is a bit sneaky and is on the Home  government watch list.

Reid’s money burned a swift hole in his pocket. He tended to toss it down hot potato-style at Target mere moments after it was  issued. The Bank of Ryan supervised all purchases and issued high interest partial loans when it was to the Bank’s benefit.

On the last Target trip the Bank of Ryan was using strong arm tactics to spend Reid’s money for his own benefit. I stepped in freezing the Bank of Ryan’s assets until a full audit could be conducted assuring a S&L crisis aversion. Reid set his sights on a more expensive toy then he could purchase under his current economic conditions and went home with money in pocket to save for the next trip.

A few days later I was surprised when Reid mentioned that he had no money. We hadn’t been anywhere that he could spend it. I had even recently seen it in his kitchen jar.

“Where did the money go?” I asked.

“I gave it to Ryan.” Reid answered.


“Because he helped me.”

“Oh, that is nice.” I replied suspiciously.

“RYAN!!!!” I called.

“Where is Reid’s money?”

“Reid doesn’t have any money.”

“He did this morning. What happened since then?”

“Oh, he paid me.”

“Paid you for what?”

“To get his clothes out of the closet this morning.”

“How much did he pay you?”


“Wow. That seems generous of him to spend 2 1/2 weeks worth of allowance. Why would he do that?”

“I told him there was a spider in there.”


Reid was informed that both Rhett and I would have helped him for free. Ryan had created an artificial demand for clothes retrieval services through spider guerrilla marketing resulting in significant price gouging.

Kids Managing Money Resources

That story happened a few years ago and I have learned a lot since then!  Isn’t it funny how our kids can teach us a lesson faster than anyone?  One of the things I use now for managing kids allowances is a handy iPhone app.

We also have a list of kids chores by age and a big collection of the best chore charts for kids.

Please share how you help kids learn about money by posting your ideas and suggestions on our FB wall.


  1. At my place the neighbors gouge my innocent Little Princess for various reasons. $10 for a pair of used dress-up shoes.

    I nominated you for an award at my place!

  2. He should be in our government, screwing the little people, lol.

  3. Angie's Spot says:

    I see a successful career in mergers & acquisitions in Ryan's future. LOL!

  4. Ha!!! Ryan is one smart little bugger!!! Poor Reid!

  5. Beth (A Mom's Life) says:

    So, did you make him give it back?? Or did Reid just learn a really pricey lesson?

  6. Mrs Lemon says:

    echoing Beth’s question?

  7. EatPlayLove says:

    How funny, it will be interesting to see as they grow older if they still have the same habits. We are just starting to allow our oldest to have a few bucks of her own. Now she wants to open a store out front to make more money.

  8. Threeundertwo says:

    LOL. I have a banker – who recently used his savings to buy himself a Nintendo DS Lite, and a spender – who can burn through $$ on junk in minutes flat.

    She would totally use that spider line too. Genius.

  9. Ok, that was hilarious. I can’t even comment because I am laughing to hard to put words together.

  10. Hip Mom's Guide says:

    Ahhh, the politics of economics…even at such a tender age. Government employment in the future, perhaps?

  11. spinning in our own direction says:

    That just totally cracks me up.. No surprise but way too funny.

  12. lol those little loan sharks

  13. jill jill bo bill says:

    BAHAAAA! I got the Savers and the Spenders as well. And they don’t change. EVER. Even at 21 The Saver) and 20 (The Spender) years old. (They live together in an apt to party, I mean go to college.) The 20 yr old just called to tell me he needs to bring his laundry home because for the 21 y/o to do it for him costs him $40 and that he’s paid it all summer AND he’s not doing it again…
    Wouldn’t be suprised if it was $40 a load. (The spender is also quite lazy at times.)

  14. Older siblings…

    That is absolutely hilarious. Will be passing post onto my husband for entertainment! Loved this post!!!

  15. Happy Campers says:

    Ahhh ha ha ha hah a…..he is one SMART boy! Destined to be the head of a company, for sure. Sweet Reid…trusting his brother…

    That’s too cute 🙂

  16. AMomTwoBoys says:

    That is one SMART kid. You’re going to have to keep your eyes on him.

  17. Elizabeth says:

    Ditto Beth’s question.
    That is so stinkin’ funny.
    That boy sure does have his finger on the pulse of economics.
    Blessings, E

  18. the planet of janet says:

    keep an eye on that kid! he’ll go far.

  19. Marcy Writes says:

    Clearly the child is a genius. This is an official diagnosis. You are welcome.

  20. Amy @ Milk Breath and Margaritas says:

    This is hilarious! Some sort of microcosm of sub-prime mortgage scandalish stuff here.

    Actually, you may want to chat with him about ethical banking practices, since he’s clearly an evil banking genius.

  21. Texan Mama@WhoPutMeInCharge says:

    Oh, that is too funny! And you are a very generous mommy. My kids get $1 per year of age PER MONTH. Yes it has cut down on them asking for junk. I could write a whole post on the results since I’ve instituted allowance. SE hoards her money like a starving person hoards food, RS spends his money like it’s burning a hole in his pocket, and JL swiftly loses his. Funny how I predicted exactly that.But I loved your story about your little entrepreneur. Bill Gates watch out.

  22. That’s hilarious! $5.50!

    It must be a birth order thing. It’s the same way in our house. A1 won’t spend a cent. A2 spends every nickel on crap in the $1 bins at Target.

  23. Jennifer H says:

    So, did Ryan get to keep the money? And was there a spider in there?

    The suspense may kill me. (You think I’m kidding, don’t you?)

    This totally sounds like something that my daughter would pull. She was selling junk from her room to her brother about a month ago. One tiny thing for, like, 5 bucks.

    I was torn between “Atta girl!” and sympathy for my poor (literally) boy.

  24. Mel, A Dramatic Mommy says:

    Clever! I’m sure Reid will think of something he can charge $5.50 for.

  25. Ryan sounds like Benjy, who went to Target and bought himself a refrigerator and filled it with yummy sodas of a many wide variety … then he charged his siblings (and parents) $.50 for the priviledge of drinking one of drinks.

    At least he never asks us to borrow any money. 🙂 Unlike his older brother, who actuall has a job!

  26. Angie @ KEEP BELIEVING says:

    Reid sounds like he inherited his guarantor’s Target spending habits.


  27. Oh that is hilarious! That kid is going to go far in life…

  28. anglophilefootballfanatic.com says:

    That is some great use of bears and bulls. He’s got miserly written all over.

  29. Insta-mom says:

    Quite the little entrepreneur you have there!

  30. binky ink says:

    While I am not condoning The Bank’s practices, I have to admit I am impressed as his seemingly instinctual tactics to ensure survival of the fittest.

    There is no way Wilbur or Peep attributed to that. Maybe it’s coming from another source?

  31. Vicki is Not So SAHM says:

    I think the Bank could step in for our own government and help out a little.

    I assumed that’s how all oldest children were (I’m assuming he’s oldest). Our oldest though has a perpetual list of things she’s ready to buy the second we enter the store.

  32. Can you hear me laughing?

    The only thing more funny and clever than your children is the writing of this post.

    Poor, trusting Middle Child!

  33. Kirby3131 says:

    Hysterical!! I love it.

  34. I nearly spit my drink out.
    This is so freaking funny. Holly, that kid is going to take over the world and everyone is going to thank him for making decisions for them 🙂
    Holy hell woman.

  35. Nanny Goats In Panties says:

    That last sentence was AWESOME! That dude could SO be president someday, with his mad fiscal skillz!

  36. Elaine A. says:

    So Ryan will do well in the “real world” and you’ll just have to worry about Reid. Unless of course he takes after his mommy in writing skills – then he should be fine. Well, maybe… ; )

  37. texasholly says:

    I just edited HTML…Lord have mercy on my blog…did this work?

  38. LOL. You have a very savvy kid on your hands. Good luck when he gets old enough to swindle the car keys out of you!

    PS: Congrats on the comment formatting change! I knew you could do it!

  39. Tootsie Farklepants says:

    That is impressive. He will make a fine venture capitalist someday.

  40. Jenn @ Juggling Life says:

    It’s gotten to the point where I will take the $5.00 being proffered from by one teen to get the other teen to empty the dishwasher!

  41. Too funny!

    Eek… Grey is only two, and already the requests to pay for things himself is making its appearance whenever we are out…

    Of course, when asked HOW he will pay for things?

    “Can I have some money?” Goober.

  42. Nap Warden says:

    It’s a lost cause once they start talking;)

  43. *LMAO*!!! Oh my goodness!! The little sheister!! Keep your eye on that one for sure!!

  44. MightyMom says:

    oh my!!!

    I’m afraid…..

    I’m not ready to govern a stock market yet…..

  45. So…has the bank yet convinced the other citizens that a nickel is better than a dime because it is bigger?

  46. Burgh Baby says:

    That kid? Is a GENIUS!

  47. Loralee Choate says:

    THAT is funny. There is nothing quite like an entrepreneurial kid. Heh.

  48. Oh Holly! THat is hilarious!! You have a future captain of industy on your hands. Either that, or you will be visiting him in Federal Prison for insider trading…

    I’ll hope for captain fo industry!

  49. We finally got rain, too. I’ve never had a prettier drive from Bastrop to Houston, for this time of year, as I had yesterday. I forgot how green everything gets when it’s well-watered by the Big Guy above!! 🙂


  50. Tootsie Farklepants says:

    My brother had a teddy too. His name was Opie. He was well loved.

  51. Beautiful pictures ! very special !

  52. Lilacspecs says:

    I love the melting leaf and the ferns. Rain makes everything so much prettier.

  53. What a beautiful post… Ahhh…

  54. merrymishaps says:

    Great photos, my fav is the last one!

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