Pencil and Paper Help Kids Learn to Manage Money

by | Kids Allowances

girl managing allowance with pencil and paper

Girl managing allowance with pencil and paper

It’s time to teach our kids to learn to manage money as a number. All you need is a pencil and paper. You pay your kids’ allowance  as a number. The kids keep track in their account.

The one rule is this: every money transaction is recorded as a number. Consequently, if the numbers aren’t written down the money doesn’t exist. Period.

Keeping track of money as a number teaches:

  1. Numbers show how much money one has (balance).
  2. Depositing (earning) money makes the number get larger (addition).
  3. Withdrawing (spending) money makes the number get smaller (subtraction).
  4. Money can be spent as cash or check or credit card or debit card.
  5. Each spending transaction is subtracted from the total.

No-cash allowance in action

One daughter adds her weekly allowance and records the new balance. She announces that there’s enough to buy a new game. Her sister updates her own balance and asks me if we could stop at the bookstore.

I take the girls shopping and pay for their purchases using my credit card. When we get home they subtract their shopping expenses and update the balances in their accounts.

Throughout this experience no cash has exchanged hands yet everyone knows exactly what happened. The girls deposited money as a number and balances grew. They go shopping, subtract the numbers in their accounts, and balances get smaller.

Get started with these allowance logs

Grab a pencil and start using these logs to give your kids a real-world money management experience at home. Pay your kids’ allowance with numbers instead of cash..

The basic account log works well with younger kids and the checkbook format helps older kids understand a standard checkbook register. Download and print both froms using the links below. The spreadsheet format is for use with computer programs that read .xls files.

Basic Account Log.  This log is easy to use with younger children. (download PDF)

Checkbook Format Account Log. The checkbook format is for older kids and uses TransType, Date, Transaction Description, Debit, Credit and Balance columns. (download PDF)

Computer Spreadsheet. Older kids can use a computer to update their logs. (download file)

Kids manage money with a pencil? Easy!

In conclusion, money is all about the numbers! You don’t manage their money entirely with cash and your kids shouldn’t either. Teach your kids now that money is a number. It’s the best lesson you can give them before they become adults.

Lynne Finch helps parents teach their kids about money from piggy banks to online banking. “It’s time to teach the kids how to manage money they can’t see or touch,” says the author of The No-Cash Allowance. Follow Lynne’s common sense approach for teaching children to manage money as a number starting with kids as young as pre-school and continuing through high school. 

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