Comments on: Use a Ledger to Teach Kids Money Management Skills

By: MarianoMama

MarianoMama — Fri, 08 Jul 2011 00:52:36 +0000

Terrific use of a ledger! Thanks. My 9 year old son wants to make money this summer and we happen to have a ton of construction going on (read: 40 thirsty construction workers every day). Today we bought bottles of water and Gatorade and ice bags. Tomorrow he will go out to them during lunch and sell each drink for $1.00. We don’t pay for chores here because we’ve established that some things we do in the household because we are part of the common good (i.e. I don’t get paid to fix dinner or fold the laundry). So this ledger will be SOOOO helpful in seeing where his money comes in and goes out. Thanks!

By: Single Mother Loans

Single Mother Loans — Tue, 14 Jun 2011 18:03:31 +0000

This is absolutely great!

I have been looking for something to teach my daughters other than checking something off while incorporating technology and responsibility. This is a great idea since it also teaches them the concept of saving and seeing their balance grow!

Will definitely use this article in an upcoming post on my site!

Thanks!

By: Jamie

Jamie — Thu, 21 Apr 2011 03:48:56 +0000

Dude, this is ingenious. I am passing this on to my wife. If I had a financial blog, I’d be giving you some link juice right now =) Sadly I don’t have one.

By: Len Penzo

Len Penzo — Thu, 21 Apr 2011 03:48:56 +0000

The prepaid credit card idea is intriguing. I like the idea of the kids being able to go to a store, buy what they want and then swipe the card. On the flip side, what I DON’T like about it is the fact that prepaid cards come with LOTS of fees and in the end they are, well, prepaid. There are no real penalties for spending more than they can afford because the card limits the amount that can be “charged” to the total available money. Why do I think that’s a bad thing? The end result is that the kids may get a false sense of security about “real” credit cards because their prepaid card doesn’t do anything to reinforce the insidious “nasty” side of “real” credit cards – that is, if you spend more than you can afford to pay at the end of each month, then you will be on the hook for some extremely onerous interest payments.

In a twisted kind of way, I think it would probably be better to give them a credit card with a small credit limit and let them learn from their mistakes.

By: Time Is Money, So How Do You Spend Your Day?

Time Is Money, So How Do You Spend Your Day? — Wed, 20 Apr 2011 20:48:56 +0000

[...] Len Penzo: Use a Ledger to Teach Kids Money Management Skills [...]

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Wed, 20 Apr 2011 20:48:56 +0000

[...] Len Penzo: Use a Ledger to Teach Kids Money Management Skills [...]

By: Len Penzo

Len Penzo — Wed, 20 Apr 2011 20:48:56 +0000

I can’t take the credit for the idea. I got it from a friend of mine several years ago – but I am glad he passed it on to me. It is a terrific tool for teaching the kids about not only how to balance a checking account, but also the value of money.

By: Ingrid

Ingrid — Wed, 20 Apr 2011 20:48:56 +0000

That’s awesome! My boys are 7 and 10 and they need to learn about money really soon! Both have a plastic piggy and they put all their money there, each has a little more than 300, which is awesome! I’ve learned them to save all the time, but i really need a better system. Because when they want something from a store, i tell them not to use their saved money, instead i buy that item for them. And they don’t pay back. This money management that you came up with is really great! What i wish to know is what is their list of chores and the pay for each chore…. maybe i can steal some ideas from there too!!!

By: Len Penzo

Len Penzo — Wed, 20 Apr 2011 20:48:56 +0000

Here is a sample of what we pay the kids right now (the chores and compensation change over time):

Matthew: Pick up dog poo ($0.25/day); Take out trash ($0.50/wk); clean room and make bed ($0.50/day).
Nina: Set/Clear kitchen table ($0.25/day); Fold laundry ($0.50/wk); clean room and make bed ($0.50/day).

By: Calculate Credit Card Interest

Calculate Credit Card Interest — Wed, 20 Apr 2011 20:48:56 +0000

Hi Len, I think your suggestion of using a ledger is a great way to teach kids to be more financially responsible. I actually just started a short series on teaching kids about money on my site. I suggest leveraging some existing financial products, such as prepaid debit cards and savings account. But I would love to hear what your thoughts are on this. Thanks for your time!