Helping Children Learn to Spend, Save and Give

When it comes to money, are you a saver, spender, or giver? You’re probably all three, but if you’re like most Americans, I bet I know which one you are better at. As a parent, you know that making your children financially responsible is important, but it isn’t easy… especially if you weren’t born with the ‘money-gene’ yourself. Enter the LearningCents Bank.

Designed by two moms in Atlanta, the three compartment bank has space for money to Save, Spend and Give. The compartments are clear so kids can see their money grow which is a nice improvement on the ‘how much do I have in there’ problem inherent in the old-fashioned piggy bank. Other great features include the aforementioned Give compartment which is a nice addition to teach children about charity at an early age. Another feature are the dry erase lids on each compartment to easily track money. The lids are also large enough so the bills, coins and even gift cards can be placed in the compartments. The LearningCents Bank is the brainchild of Caryn Boxer, a clinical psychologist and mother of two, and Gail Duner, a consultant who is also a mother of two. The duo founded LearningCents in 2005 and have already racked up awards from national publications. In addition to running their company, Caryn and Gail also lead workshops for parents about raising financially savvy kids.

We asked Caryn and Gail about the ‘money-gene’, chores and allowance, and encouraging charity in children.

Clever Parents: You mention that your kids weren’t born with a ‘money-gene,’ do you think that some people are naturally better at managing money than others?

LearningCents: Yes, some people seem to be naturally better at managing their money. In the same family, you will often have one child that’s the “saver” who hoards every penny, while another has to spend every dollar as soon as they receive it. And then there are some kids that are very charitably-minded and want to give all their money away. As parents, it’s our role to help kids learn how to best allocate their money for spending, saving and giving.

CP: Do you believe that kids should have to perform chores for their allowance?

LearningCents: We think that the main purpose of an allowance to give children the opportunity to learn how to manage money.

We support paying children on a weekly schedule. This regularity helps reinforce that money is a part of our everyday lives and it comes in a predictable way, like a paycheck for an adult. (e.g. knowing that they have to get 4 weeks of allowance before they have enough to buy a specific thing they want).

We also believe that as a member of the household, children should be required to perform age-appropriate chores. And there should be consequences for failing to fulfill their family responsibilities. However, it may not be effective to tie the chores and the allowance together, because some kids may “choose” not to do their chores and be willing to forego their allowance. This defeats the goal of enabling parents to pass on the money values they want to instill.

CP: What are the big differences, in your mind, between the LearningCents Bank and the old fashioned piggybank?

LearningCents: The LearningCents Bank is more than a place to store your money, which is the main purpose of a piggy bank. The LearningCents Bank is also a system that teaches kids that money is not just for spending, but is also for saving and for giving. By allocating their money amongst the 3 compartments, children learn the
important life skill that money has multiple purposes and can be actively managed. The LearningCents Bank also has dry-erase lids and a pen, so kids can count their growing cash flow and track the amounts in each compartment. The old-fashioned piggy bank is a one-dimensional whereas the LearningCents Bank better reflects the more complex financial world in which we actually live.

CP: I like the idea of a separate ‘Give’ section. What are some ways that parent can encourage charitable giving with their kids?

LearningCents: There are lots of ways parents can encourage charitable giving and teach their children to take pride in being contributors to the community.

Some activities include:

• Have kids research charitable organizations (disaster relief, animal shelters, children’s hospital, religious institutions) to decide who will be the beneficiary of their “Give”dollars
• Create a matching fund to generate greater giving power
• If it’s local, visit the charity so kids can learn how their contributions help others
• Make regular contributions to school, church or synagogue.
• Birthdays and holidays are a good time to teach our children about giving, when they are the beneficiaries of so much.

One option is to make cash contributions to a favorite charity

A second option is to participate in a food or toy drive,where children can use their GIVE money to purchase needed items and deliver them directly.

CP: You say that families should set fixed amounts, either dollars or a percentage, for contributions to each section. Do you think kids should be involved in the setting or is that something parents should set ahead of time?

Learning Cents: The parents should set the allocations ahead of time and keep them consistent from week to week. The dollars or percentages that each family adopts reflect the family’s values of spending, saving and giving.

CP: How can I buy Learning Cents?

LearningCents: The LearningCents Bank is available online at www.learningcents.com. The website also lists many retailers across the country who stock the bank.