When you think of family vacation, probably the first thing that comes to mind is the opportunity to teach your kids about new places, history and culture—not to mention the chance to enjoy some quality time relaxing.
What you might not consider is that family trips can also be great opportunities to teach kids about managing money. From figuring out where to stay to determining what a proper vacation-spending budget will be, the typical family getaway offers up a lot of potential teachable moments.
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Here, five moms and dads share the vacation tricks they used to teach their own kids about finances. Take a page from their book, and tell us in the comments—how have you used family vacation to teach your kids about money?
Lesson #1: Saving for a Goal
As old-fashioned as it may be, many parents advocate using a family coin or bill jar to supplement the vacation fund (we talked more about that here). You won’t save for a whole trip this way (at least not quickly), but even so, parents say it’s a good way for kids to visually see money accumulating toward a specific goal.
How to Teach It: Let kids put extra coins (or dollars) in the jar themselves to make the act of saving real. Be sure to tally the money before you leave for your trip, and decide together what you’re going to allocate the sum to so kids connect the saving effort to the reward. For example, you might spend an extra day at the amusement park, visit a museum or use the money for a special meal.
From Parents Who Have Tried It: David Bakke, a dad in Denver, has a penny jar in his house that his family uses to save toward their annual vacation. Besides adding in any loose change he can find, Bakke’s 5-year-old son can also contribute to the jar by doing extra chores. “If he chooses to do things like dust the living room, or help clean the bathroom, he is rewarded with a vacation fund deposit,” Bakke says. “Getting him to understand the concept was a little difficult in the beginning, but now he understands that the more money we have in the jar, the more fun we can have on our trip.”
Lesson #2: Budgeting for Activities
Giving kids a budget and having them choose the vacation activities that will fit within it helps them to understand the relative value of what different items cost.
How to Teach It: Give your tween or teen a budget and the ability to plan one whole day of your trip. Show her what resources you normally use to research budget-friendly activities and restaurants in the area (we talked about using the web to plan travel here) and then let her start planning.
From Parents Who Have Tried It: Russell Hyken, a St. Louis dad, let his two teenage boys plan a day on a recent visit to Utah. “We went to the Solomon Center for indoor climbing and surfing,” he says. “Afterward, they decided we should eat dinner back at the condo because it had been an expensive day. I thought that was a smart decision.”
Lesson #3: Savvy Credit Card Habits
To kids, credit cards can seem like an endless source of money, especially when you’re on vacation. As a parent, you know budgets and spending discipline are especially important when you’re away and there are so many tempting ways to overspend. That’s why vacations are a great opportunity to teach responsible credit card use.
How to Teach It: Let tweens and teens try out a prepaid credit card on your next vacation. Put a set amount of money on it and lay down the rules: Once it’s gone, the card won’t be refilled. Kids will learn quickly that credit cards don’t come with an endless bounty of money, and they’ll learn to practice discretion when using them.
From Parents Who Have Tried It: Miami dad Jim Angleton found that his two daughters weren’t very good with cash. “They’d lose it, or [forget to count their change and] get ripped off by retailers,” he says. So he began giving them prepaid debit cards when they turned 12. “It’s actually brought a deeper sense of financial restraint,” Angleton said. “They go online daily to check their spending.”
Lesson #4: You Can't Have Everything You Want
Even if we aren’t normally in the habit of giving into our kid’s every whim, when we’re on vacation, in the land of indulgences, it can be harder to deflect all those “I wants." Instead of dealing with multiple requests, set your kid up with a budget ahead of time to avoid any questions of how much they can spend.
How to Teach It: The envelope method is a tested way to teach about spending. If you’re accustomed to doling out cash every time your kid asks for it while on vacation, this is a good way to try a different approach. Give younger kids a purse or envelope with a set amount of money, and explain to them that the amount in there is their spending money. Once it’s out, they won’t have anything left, so they should make each purchase count.
From Parents Who Have Tried It: Ashley O’Connor, a mom in Myrtle Beach, SC, gave her two daughters, ages 6 and 8, $50 in Disney Dollars before heading to the Magic Kingdom, and told them that was the only money they would get for souvenirs. “The older one bought a lot of small things and the younger bought a few larger items,” O’Connor says. “It helped them learn the value of money, how to shop around and the importance of considering how much they really wanted something.”
Lesson #5: The Power of Earning Potential
Heading on vacation as a family is a privilege, not a right, and encouraging your child to chip in toward the trip will help him understand how special it is to spend that time together even more.
How to Teach It: A lot of parents let their kids earn money to spend on vacation by doing extra work around the house (above and beyond their regular chores). Then, they give the kids the money each has accumulated before heading out of town or while they’re away.
From Parents Who Have Tried It: Susan Hettleman, a mom in Brooklyn, NY, puts a unique spin on the idea of earning spending money for vacation: She gives her two daughters $1 for every new food they try. “This is the only souvenir money they’re given, so they have a real incentive to try new things,” she says. “In Italy, they tried pretty much everything we put in front of them.”