Umpqua Bank

Learn to Earn Lessons and Activities

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Do You Really Need It?

Teach your child the difference between needs and wants.

In a child's mind every desire might be considered a need. Help your child understand the difference between his or her needs and wants, and how to make the distinction. This is a critical skill to master as children begin managing their own money.

Activity:

Ask your child all the things he or she needs and list them on paper. Then go back and work through each listed item, explaining which ones are actual needs and which ones are merely wants. Highlight the needs in one color and the wants in another color to help keep track. Be sure to explain why each item receives the classification of Need or Want.

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Dream Big

Teach your child how to plan and save by setting goals.

A quote by Larry Elder states, “A goal without a plan is just a wish." We don't want our children simply wishing when it comes to their money; they need a plan! Thankfully, whether it's a family vacation or an upcoming play date with a friend, your child already knows how to plan. Help your child apply these planning skills to reach financial goals as well.

Activity 1:

Help your children set goals for the coming weekend and then demonstrate how this goal-setting can be applied to money as well. Start by asking your child what games he or she would like to play or how far he or she would like to ride a bike. Help your child write down these goals and track them over the weekend. Then help your child think of a financial goal, such as an item for which he or she needs to save money. Work with your child to create a money-saving plan to obtain this goal. Be sure to track his or her progress along the way.

Activity 2:

Children do a wonderful job of letting their parents know what toys, games and gadgets they want. Many times parents tell children to add these items to their holiday or birthday wish list, but these special requests are great opportunities to teach goal-setting. The next time your child mentions wanting a special item as a birthday or holiday gift, ask if he or she would like to have the item sooner. Chances are the answer will be a resounding “yes", and you can work with your child to help him/her develop a savings plan to make this wish a goal with a plan.

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Earning Your Keep

How to associate allowance with income.

Money can quickly become confusing to a child when we use unfamiliar words such as income and expenses. Still, if your child receives an allowance, he or she is already intimately aware of income, though it might not be known by that name. Help your child understand the concept of income through this activity.

Activity:

Talk with your child about your own income and how you earn it. Let your child know that an allowance is a form of income. Just as different factors affect your income, they also affect your child's income. These factors include:

  • Age - The age of your child often determines allowance amount. Explain to your child that this is similar to how long a person stays at a company, along the way gaining experience and expertise that is then valued at a higher amount.
  • Purpose of Allowance - Just as we get paid for the job we do, your child gets paid for the chores he or she performs.
  • Expenses - Explain to your child which expenses he or she is expected to use allowance money or “income" for, such as movies, games, and candy.
  • Payday – Designate one day of the week as payday and keep this day consistent. Also discuss different forms of payment and have your child choose a preferred form.
  • Save, Share, Spend - Discuss with your child how to distribute allowance among Save, Share and Spend piggy banks.
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Opening an Account

There is no better way to teach savings than by opening a savings account.

As adults we understand the benefit of having our own bank account, but there are many benefits for your child in having his or her own account as well. Opening a savings account at the bank is one of the best ways to teach money management and get your child excited about watching his or her money grow.

Activity:

Take your child to the bank to open a savings account. Umpqua associates are happy to walk you and your child through the process. Together, help your child make his or her first deposit, set goals for future deposits, and learn to manage the account.

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Make Change

Using money to understand money.

As adults we typically use money on a daily basis, and spending has likely become second nature. Children, however, are still learning what money is, what it's used for, and why it's important. Teach and reinforce these lessons by showing your child how to use money.

Activity 1:

Review your family budget with your child, taking special notice of your grocery budget. Then take your child grocery shopping with you. Have your child hold the shopping list and include him/her when making food selections. Using pen and paper or a calculator, record the expense of each item as you put it in the cart. Let your child know your limit and check several times to make sure you are still under budget. Once at the cash register, have your child help you count the correct amount of money to hand to the cashier.

Activity 2:

An alternative to taking your child shopping is to set up a pretend store in your kitchen. Review your family budget with your child, taking special notice of your grocery budget. Make a shopping list and have your child find each item. Your child can then use fake money or real money supplied by you to “purchase" groceries.

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Earning Potential

Teach your child the difference between earned and gifted income.

The difference between earned and gifted income is an important but often confusing lesson for a child, especially because a majority of a child's income is typically gifted. Demonstrating the importance of earned income teaches your child that as an adult he or she will need to work for an income. Help your child understand this important lesson and gain a healthy work ethic through the following activity.

Activity:

Have your child write down all the ways he or she obtains money. Then:

  • Ask your child if he or she knows the difference between earned money and gift money.
  • Have your child highlight all the actions on his or her list that represent earned money.
  • In a different color, have your child highlight all the actions on his or her list that represent gifted money.
  • Together, create a list of special chores or jobs that your child can complete around the house and for neighbors and friends to earn money.
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Smart Spending

Help your child prioritize his or her spending.

Without budgeting skills and prioritization of spending, money can be quickly and often foolishly spent. We want our children to make the most of their money by spending it wisely.

Activity:

Have your child write down all the ways he or she obtains money. Then:

  1. Discuss how important the item really is to your child.
  2. Discuss the cost of the item in a way your child understands, such as saying that an item will cost two weeks of allowance or one week of extra chores.
  3. Help your child understand that once they spend money on this item, that money is no longer available to be spent on another item.
  4. Help your child comparison-shop at a few stores or online to find a better bargain.
  5. Finally, allow your child to make the ultimate decision of whether or not to buy the item.
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Let's Make a Deal

Teach your child the fundamentals of trade and barter.

Understanding the fundamentals of trade and barter helps your child understand the history of economics and how people were able to get the items they needed before money was created.

Activity:

The next time you make lunch with your children, mix it up a little. Give one child the bread. Give another child (or yourself) the peanut butter and jelly. What will they need to do to make a complete PBJ? They need to trade!

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Extra Credit

Teach your child the basics of borrowing.

Responsible borrowing is a vital life skill at any age. Although your child may only be borrowing toys at this age, his or her borrowing habits will be carried into adulthood. Talk to your child about what would happen if they lent a toy to a friend and then this friend did not take good care of the toy. Would your child want to loan a toy to this friend again in the future?

Activity:

Take your child to the library to sign up for his or her own library card. This is a great way to reinforce responsible borrowing habits. Work with your child so they understand what is acceptable when borrowing a book. When is it due back? What happens if it's late? What if they damage or lose the book?

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Risky Business

Introduce the concept of risk and how to minimize it.

Risk can be a difficult concept even for adults to understand. Yet assessing and minimizing risk is critical in managing one's finances. Help your child learn these concepts early in life.

Activity:

Talk with your child about the following scenarios. Have them tell you what can be done to minimize risk in each setting.

  • What would happen if you rode your bike and fell on your head? Would it hurt? What could you do or wear to be safer?
  • What do you do before you cross the road? What could happen if you didn't?