Teaching Your Children About Money – The Lunch Money Account

I am the mother of a ten and a twelve-year-old girl.  Their school no longer allows them to carry cash to purchase school lunches.  It’s not my favorite system.

The Problem: I want my girls to learn how to handle real money and know that there is a finite amount of it.  The school allows the children’s account balance to go up to negative twenty dollars before the kids’ accounts are cut off and they are given a cheese sandwich.  I can appreciate their perspective of not wanting the kids to go hungry or to be embarrassed when trying to purchase lunch, but the kids continually overspend their accounts.  Every parent I talk to has the same complaint. The kids have no idea what the account balance actually is.   Does this sound like when an eighteen-year-old is given a credit card and don’t know that they’ve reached their limit until the card is turned off?

What We Want to Teach: We want to teach the children healthy spending habits.  We want them to be aware of how much money is left in their account, or if there is too much month left and the end of the money.  We want to show them that we can purchase Gatorades for $0.50 a bottle at a warehouse store instead of the $2.00 a bottle in the school cafeteria.  We want to teach them how to budget their money and let them know that it is okay to buy a brownie every day, but if you do that you have to make the choice to bring your lunch everyday that week instead of buying lunch one day that week.  We want to teach our children how to be responsible with credit.

My Current Solution:  This is what is currently working in our house.  On the first of the month, I deposit $40 into their lunch money account.  On the first of the next month, if the account balance is negative, they don’t get the account refill.  I will bring the account current with $1 extra in it so that I’m not on the hook to the school, but that’s it.  They can ask the school what their balance is when they make a purchase or they can ask me to look up their account balances at any time, but that is their responsibility and not mine.  My youngest went over in October.  No November refill.  She has begged me to put money in – not happening.  She knows that when I pull the account up on December 1st, if it is negative, she won’t get a December refill.

What This is Teaching:  The girls are learning to check their balances and to know where they stand with their finances on a regular basis.  They are learning to budget their money.  They are learning its okay to splurge every now and then.  Just know the impact of the splurge and adjust accordingly.  In hindsight, maybe the school lunch account still isn’t my favorite thing, but I am using it to teach the girls valuable lessons about money and credit.  Now, we just need to work on actually completing your chores to get allowance…