This post may contains affiliate links, which means I receive a small commission at no cost to you. Please read the full disclosure here.Summer is right around the corner! Summer fun! Time to relax, time to enjoy, and time to have fun. Summertime is when memories are made.
Personally, we enjoy our summers and was one of the main reasons for starting Money Bliss.
Summer is also a great opportunity teach kids about money!
When summer rolls around, my want to do everything and keep the kids busy! Go to the museum, go to the zoo, go to the waterpark, go out to lunch (a lot)…the list can go on and on. All I can see is dollar signs ($$$$$) everywhere. Many activities are getting more and more costly. Even a trip for ice cream can set you back $10-15.
So, what better time to teach them about money than right over the summer?
More than likely, you will spend some money on kids, activities, and fun over the summer. Right? So, why not, include your kids on how money is spent and let them benefit?
By planning ahead, the kids can actively participate in the money process. It is a chance to teach them about how to count dollars and cents, how to know if they received the correct amount of change, how to negotiate for an increased summer fun budget; the learning opportunities are endless. Most importantly, how to understand the relationship with money and how they can make their own decisions.
Restated – the goal is for our children to make wise decisions as adults and make smaller money mistakes as children.
How to Teach Kids about Money over the Summer
1. Set a Budget for Summer Fun
The first step is to determine how much money will be allocated to the family summer fun money. Be realistic on what you can afford. Also, understand the costs in your area for activities. Whatever you decide, let your kids know the amount allocated for family summer fun money.
The summer fun budget must be handled in cash. Kids understand the concept of cash. The use of credit cards, debit cards, or prepaid cards is difficult for their young minds to understand. With cash, they can touch it, feel it, and see it leave their hands.
2. Make List of Summer Activities
The next step is to have your kids make a list of activities and places they want to go over summer break. Most of all, let them be creative! If your kids are under 5, you will have to help them write their list. But, let them do the thinking first. Elementary school age kids will need help in knowing what will cost money and free activities. Middle school age kids and up can work on this independently; their incentive is access to the summer fun money.
Now, take your big list of summer activities and divide it up into two lists. 1) Free Summer Fun and 2) Summer Fun $$. Seems like most of us could go Pinterest-crazy here. However, just remember, this is a learning lesson for the kids and they benefit by doing most of the work.
In the past, we have used the Free Summer Fun list and crossed off activities as we went. Our list can easily top 50+ activities. Instead of putting park or playground, be specific and list the names of the parks. Same with bike rides; put bike ride followed by a picnic lunch at this specific park. Libraries are a great resources. Many local libraries partner with local museums and zoo to provide free passes. All that is needed is just a library card.
Take the Summer Fun $$ list and estimate how much each activity will cost. This is a great opportunity to let children understand how much things costs. Make sure adult admission is included, too!
3. Summer Fun Money Plan
Now, it is time to determine what activities fit into the summer fun money. Hence, this will be the hardest step! Just like adults, kids will want to spend more money than what has been budgeted. THIS IS A HUGE LEARNING OPPORTUNITY!
Take advantage and time to explain why there is only so much available for the summer fun money. Help them to prioritize what is more important and explain why you focus on the important things first. As adults, this would be focusing on the basic expenses (housing and food) over fun, discretionary expenses. If you have multiple kids, let each child pick at least 1-2 activities of their choice. They will learn to compromise with their siblings while learning a necessary skill for adulthood.
Another thing I always focus on with my kids is how many free activities on our their list. This helps them understand that having fun doesn't always include spending money. This is the evil trick our society believes in and has led to over $90,000 in average household debt.
Looking for ways to stretch your summer fun budget…check out this post.
Write out on paper the plan to spend the summer fun money. The goal is to be under the amount in the summer fun money, but not exactly zero. Make sure to keep a small amount as a buffer. Just like as adults do with emergency funds.
For older kids, don't be surprised when they negotiate for an increase in summer fun money. It is totally natural, and consequently, a wonderful learning of how the real world works. Encourage them to prepare a presentation for the adults covering why more money is needed and how much additional money is requested. As the adult, prepare solutions that work in your household or a flat NO. Think outside the box? Maybe they can do be paid a bonus on their commission jobs. How about the kids add some of their spending money to summer fun and possibly the adults match it. Another idea is the kids take on a project on the house that you would have paid someone else. Honestly, our kids are probably more creative! Furthermore, this is a great time to teach your kids necessary life skills like hard work.
As a bonus, whatever is leftover in the summer fun money budget, the kids get to keep and put in their savings account. A small gesture to help them learn that you don't always have to spend what you have. Saving for a rainy day is always a great idea!
4. Spend the Summer Fun Money
Most of all, this is where memories happen! Go to the bank and get your summer fun spending money in cash. Grab an envelope and label it! Let each child count out the money. Take time and consequently help them understand how money works.
Fun Counting Idea –
Do kids truly understand money? Here is a fun trick to let them learn how money adds up. Start with a single $100 bill. More than likely, it has ZERO meaning. Then, look at one dollar bills. Lay out one hundred $1 bills on the table. (Grab a camera for their reaction.) Stack the one dollar bills next to the single $100 bill. Explain how all of those one dollar bills add up to the $100 bill. Continue with $5, $10, and $20 bills.
The biggest learning lesson is to let your kids manage the summer fun money!! Let them manage the envelope. Honestly, I would keep the envelope in a safe-place like a desk. When headed out for an activity, let them remember to grab enough cash to cover the summer day.
**I know it is hard, but don't let our mommy voice remind them to get their money.**
In any case, our goal is to raise independent, productive adults. This will only happen if they make mistakes now and learn from those mistakes. Most noteworthy, the stakes are raised the older they get and the mistakes are more costly.
Another key learning moment happens when the kids want to spend more money than what is left in the summer fun money envelope. DON'T COME TO THE RESCUE! Let them solve this situation on their own. Offer solutions if asked, but not additional money.
Interested in kids saving $2000 under your roof? Check out the Save Age Challenge for Kids!!
Honestly, you would have probably spent the same amount of money. Through involving your kids, you are setting them up for success with money. Throughout the summer, they made decisions on where to spend or not spend the summer fun money, enjoyed spending money, worked hard to increase their summer fun money, and maybe even earned the bonus for their saving accounts.
This is the one easy step to teach your kids about money over the dog days of summer.