3 Creative, No-Stress Money Lessons for Your Kids’ Next Vacation

Going on holiday can teach your kids about money in so many ways. The good, the bad, and the ugly all come out when you are spending time away from home with your family. Maybe it’s the close quarters, maybe it’s because mom and dad see that they are spending WAY MORE than quarters. Whatever it is, take a deep breath and then take this opportunity to help your kids understand money a little better, even while making the whole expedition run a little more smoothly.

How Parents Can Teach Financial Literacy Without Losing Their Minds

For most of us, the idea of educational family vacations brings to mind images of Civil War battlefields or maybe hitting a museum or two. In general, this kind of thing isn’t likely to inspire or teach anyone who isn’t already interested.

Imagine this instead: no-stress ways to use your vacation to teach your kids the basics of financial literacy.  Whaaat? Imagine that you’re getting ready for your family’s summer vacation and the kids are already hounding you about all the things they want to do and want to buy on the trip. All of these cost money, as you probably know all too well but they may still be a little hazy about. This presents you with a number of ready-made money lessons – you only have to tweak their experiences a little bit and reinforce a few of the most important ideas in order to kick-start their financial education.

We all know how kids get excited because we were kids once…remember? More often than not, this manifests in them nagging you for money to go on a ride, buy a toy, or enjoy a snack. How do we get the asking, begging, and pleading to stop – really stop? As you’ll see, we can turn it around so this energy is turned to thinking inwardly about financial literacy and our vacay actually starts teaching them something about money. In other words, having a few simple yet meaningful conversations with your children not only gets their financial education started (which makes them all the more likely to succeed later in life), it also takes some of the pressure off you and makes the trip that more enjoyable.

So what, specifically, can we do differently this holiday season to avoid raising a spoiled, nagging brat with the financial literacy of a porcupine? What can we do to teach them how to view finances and contentment? We’d suggest teaching these 3 money lessons this holiday season:

1. Earning Money Takes Work, But Not All Work Earns Money

Long before you start your educational family vacation, it’s time to demonstrate to your children that cash doesn’t grow on trees, nor indeed inside ATM machines. Be proactive in teaching this lesson.

Creating an Itinerary (and a Little Buzz)

First, while you’re still planning the trip, tell them what you’ll get to do together. If they’re older (and hopefully a little wiser), allow them to pick one or two adventures themselves. Obviously, these need to be enjoyable for the whole family. More importantly, though, have them research how much each will cost. It is not like they are paying for it, but the hope is they will appreciate the experience a bit more when they actually know what you as a family are spending. This is kind of a basic way to teach budgeting principles, namely that getting one thing usually means giving up something else. For example, spending an expensive day at a water park leaves less money for a boating excursion, and giving older kids a say in these kinds of decisions brings home this important aspect of financial literacy.

A Fun Example

One of our friends did this with their oldest last year. Their son said, “Dad I did the research. It costs $75. It’s going to be great. It’s this inflatable ball thing where we roll down a hill.”

So they drove through this trailer park in the backwoods of Missouri and got to this barn where this guy had dug out a huge ditch all the way down this hill with a tractor. Mom and Dad both squeeze through this tiny hole to get into this inflatable ball, clamp on to each other and the guy just literally kicks the ball down the hill.

They said you could just hear their son laughing hysterically. While the parents were horrified as they made it to the bottom alive but their hearts racing a mile a minute. It was a great memory for their family and their son got to own that.

Earning Cash for Chores

Making sure they know all about your itinerary isn’t just to show them how these tradeoffs work and stimulate their imaginations, but to inspire them to get ready for each activity by earning their own pocket money. There are a number of ways to do this, such as setting up 5 chores before your trip so they can each earn $150 for all the extra purchases. What are these extras? You know those stops at the 7 Eleven, souvenirs – all this stuff.

Here’s the fun part: Put their earnings in a clear jar somewhere they see everyday. Talk about encouragement! They will see the money they are going to have to spend, know that it grows because they’re earning it, and get a head start on the kind of financial education many people only receive once they’re employed.

Teaching that Money Is a Privilege, Not a Right

You don’t, however, want to put across the message that every effort should result in a tangible reward. Sometimes, we do the dishes or take out the trash just because we know our family is worth supporting and we want to do our part.

We believe the “Everybody gets a trophy” response to kids from this current generation was not helpful. It programmed kids at an early age to expect to be rewarded for doing things most kids from earlier generations just did.

Megan just returned from a trip to see her cousin. Her cousin’s son moved to a different school this year. She told her how this new school gives rewards for everything. Her son gets a sticker for being well behaved in the classroom but she thinks their son should be behaving well in school as a general rule, so she is puzzled at the daily reward for his behavior.

Now when he’s at home he expects to be rewarded for things like helping out in the kitchen or cleaning his room. She told him that is just part of being a good family member, not cause for medals or stickers. It certainly warrants a, “Thank you,” but not a plaque.

Be on alert. If you hear things like, “If I do this, can I get that?” stop that thinking in its tracks. (Their future spouse and employer will thank you.)

Now is the time for them to learn you don’t need a reward for the good things you do in life. In fact, finding joy in life is not always about what you can get, but also what you can give.

2. Using Optional Purchases to Teach Budgeting to Your Kids

One of the best ways to teach financial literacy is to allow kids to make their own mistakes with their own money. Ideally, as we’ve seen above, this means making them earn their own holiday fund so they can form a mental link between effort and earnings. Try to teach them a little about budgeting by helping them figure out whether or not they have enough, and what they want to spend money on. It is a hoot to watch them grapple with these issues, but this is also a vital part of a young person’s financial education.

A Cautionary Tale

Shopping carts spill into the snowy parking lot. The family stands outside ringing the bell for the Salvation Army. You make your way into the store where Christmas music streams overhead. They’ve stacked the new “must-have” items right in front so you make your way around the display, ready to dive into your list. And then you hear it.

“But we already have games at home, Kylin.”

“No, mom, that’s not this. I want this one. We need this one.”

“I don’t think we do, dear. Let’s stick to our list.”

“No one likes the boring list. I want this. We need this. I came with you today, didn’t I? We never get the good stuff.”

The mom stoops to grab the box …

Unfortunately, this will not be an isolated incident this holiday season. Many of us – most of us – have been there. In the middle of a store, our kids begging for the next best thing. For something else. Something they just can’t possibly live without while they throw in a “reason” they deserve it.

Make Sure They Have Money up Front for Extras

Whether they’ve earned their own money doing chores or it’s a gift, allow them a fixed amount to spend on whatever extras they want during the vacation. It will be up to them to decide what is and isn’t worth spending this on.

So, what is an extra? You know when you are on a road trip and you stop at a convenience store for fuel and next thing you know everyone grabs chips and a soda? That is an extra. Or, you know when you are at an amusement park and you want to get a souvenir? You came for the experience, not the stuffed animal, so that is an extra.

Be sure to clearly explain to your children how much money you will give them for extras each day, every week, or for the entire holiday. Give them the total amount and then…let it go. Say, “This is your money for extras. If you spend it all in your first two days, too bad!” Try your best to teach them how to budget, but also make it clear that planning their spending is in their hands. Sometimes, the best money lessons are those that hurt a little bit; it’s better to learn these before you can have your car repossessed or get evicted from an apartment.

Giving them cash up front teaches the more impulsive kids how to make their money go further. There is also an opposite side to that. Some kids are afraid to spend money, so you can tell them, “This is your vacation money, you have to spend this money this week.”  If they don’t spend it, they have to give it back to you. In other words, thinking in terms of Money Personalities, we want to make sure we teach something to both the Spenders and the Savers.

Enough Is Enough!

You may have even heard this one as a kid. Moms have been right for generations: sometimes, enough really is enough. This is a simple money lesson, but somehow complicated enough that many of us have to learn it over and over again.

It is such a huge win to teach your child to be content with what they already have. Just think about how that could change their whole life. (And make yours better while they’re under your roof.) Are they always asking for more? If so, stick to your “no” at the store. Plan, at least once, to leave the cart at the check out when they won’t stop asking. (Then they’re the only one surprised. You’ve been expecting it.)

Set expectations before you’re in the heat of the candy aisle of gift shop. And then follow up later about your conversations at the store. Point out their contentment successes and talk through any stubborn behaviors.

You don’t need to be mad at them. They don’t know a better way until we train them. Listen to their language. Do they always beg for more, bigger, better, extra? Keep your ears open and help them build up their ability to hear “no”. Break the habit of expectation that something is always owed to them.

Have a conversation with your child to help them understand the dangers of always wanting more. They probably don’t even realize it. Help them see their behavior and see the benefit of strengthening their “gratitude attitude”.

For example, every kid loves souvenirs, maybe it’s a souvenir of their favorite Disney character or their favorite superhero or even a hermit crab…guilty 🙂 Let them work out the details of which souvenirs to buy or which one they want; remember, however, that this is their budget and all that they will get on the trip. Also, remind them that there will be plenty of stops to buy souvenirs…Oh and make sure you lead by example…he he.

If we give in to their every wish, the result is an entitled child. No one wants that. So let’s do all we can to avoid raising a spoiled brat who will only struggle later in life. Don’t encourage thoughts like: “Hey, I’ll just spend my money in one place cause mom and dad will just give me more.” Teach your kids to budget and let them make money decisions…see how this will teach them this this super-important life skill?

When you stick to your guns about what they get to spend, they learn the importance of thinking carefully when making a decision. We know what you’re thinking, “they’re just kids, and they still have a long time before they will have to make any “major” money decisions on their own!” Here’s the thing, though: if you start teaching them the importance of budgeting their money while they are young, then chances are that they will be more intentional with their money when they are out of your house.

3. Be a Good Financial Role Model – In Word and Deed

There are 50 million money decisions to make on any holiday trip. I (Megan) remember all the money fights my parents had on our vacations, growing up. Sometimes, these arguments even ruined the whole day. Use your vacation as a moment to show your kids how to talk through money decisions. Educational family vacations don’t need to be boring, but don’t neglect letting them know what’s going on on the financial side.

Talk It Out

When all is said and done, this is the single greatest way to teach our kids financial responsibility. While we are just “doing life” together and spending time with one another, there are plenty of opportunities to give them a few pointers about money and also hear their thoughts on the issues. While on vacation, you’ll probably be more relaxed and have more time for this, but try to make this informal method of giving them a financial education a priority.

This never needs to be a guilt-ridden discussion, but at a certain age, it’s helpful for them to know how much a house costs or the difference in price between types of tennis shoes, etc. It’s a good exercise with teenagers when you’re driving around to ask them how much they think things cost. Talk through the reality of prices. It’s good for them to know and appreciate how expensive life can be.

We are huge fans of summer jobs for teenagers precisely because these teach kids the real value of money. They learn how quickly cash spends and how slowly it adds up. For young and old kids, credit cards make them think you “have” the money all the time. We remember when Cade was a first-grader and asked for something and Bethany said, “No, honey, we don’t have the money for that.” And he told her, “Just use that plastic card.”

They are learning at a young age. What are we teaching them? Help them understand that expenses add up and there is more to life than their wants. Remind them they are a member of a family, a community, a nation, and a world in need of their generosity. It’s not all about them.

Depending on their age, find opportunities to talk to them about how much stuff costs and an average starting wage these days. Share with them about expenses you pay like health insurance, cell phone bills, or even the mortgage.As they get older, use these numbers to teach budgeting – this is a kind of math every adult needs to understand.

Vacations and Financial Anxiety

While you’re enjoying the vacation, don’t ruin everyone’s good time by being really anxious about spending money, talking about it the whole time and spoiling the trip.

Saying things like, “Oh my gosh!  I can’t believe we are going to do that it costs so much money!” affects everyone’s mood without actually saving a single dollar. Even worse, what that teaches your child is that the trip is all about money when a family holiday should really be about memories, fun, and togetherness. Be ready for some spur of the moment adventure – kids need to see this modeled, too. So be sure to leave some wiggle room in your budget for the last minute ideas!

Even so, you may want to talk about your money anxiousness before the trip because that teaches your child that it is okay to have money anxiousness. You just need to find the right time to talk about it, get it out, set it aside, and then go have your fun vacation. As we age, we’ll never say, “I’m sure glad we never took any vacations with the kids.”

Final Thoughts

Work through these 3 lessons with your child with love and with an eye on their life at home with you and their future success. We aren’t doing it perfectly by any means, but we are doing all we can to avoid raising a spoiled brat with no sense of financial responsibility. We hope, instead, to raise contented, hard-working, responsible adults.

Yes, family vacations do take some work to plan and they cost money, but memories are truly priceless. Every moment won’t be filled with smiles and rainbows and thankful kids, but some moments will be. And those moments will make it all worthwhile. Involve them in the planning, allow them to budget some funds, and share how you feel about money and you’ve made a memory and helped your son or daughter take steps toward a positive financial future.

That’s worth the effort now, for sure!

Taylor and Megan Kovar

The Money Couple

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