I'll admit it -- my kids watch too much TV. I've occasionally thought about just selling the televisions and using the cash to buy stock in Universal Display (Nasdaq: PANL ) or CBS (NYSE: CBS ) , to take advantage of everyone else's kids and their viewing habits. But I know I couldn't take the subsequent complaining.
So to make it easier to limit the screen time, my wife and I decided to institute a ticket system, with each ticket worth 30 minutes of watching television. Interestingly, the tickets have turned into a form of currency, allowing us to teach some simple personal finance lessons to the kids.
We give the kids an equal amount of tickets each day, but naturally they watch more television on the weekends than during the week. In order to have enough for the weekend, we encourage them to plan ahead and save tickets during the week. Lesson 1: Have a spending plan.
Our 5-year-old son took saving to the extreme. After a few weeks, his stockpile of tickets was larger than ours, and we were in danger of going out of business. In order to replenish our supply, we set up a bartering system where the kids could use their tickets to purchase items or privileges. For example, in our family, picking the restaurant where we eat out is a sought-after prize. So far, there hasn't been much competition, but eventually, we might have to auction off goodies in a way that would make eBay (Nasdaq: EBAY ) proud. Lesson 2: Save for fun stuff in the future.
On the other hand, our 6-and-a-half-year-old daughter is addicted to TV and hasn't quite learned the saving lesson. In fact, she often runs out of tickets right before her favorite show. In order to teach her a lesson, we actually started charging her interest to loan her tickets. Even at interest rates that would make Advance America (NYSE: AEA ) and First Cash Financial (Nasdaq: FCFS ) look generous (we loaned her one and made her pay back two the next day), she's still interested in TV-ticket payday loans. Lesson 3 (not learned yet): Get an emergency fund.
Fortunately, my kids are young, and we've got some time to instill the virtues of saving and investing. While it didn't start out as a lesson in personal finance, the ticket system has made me realize there are more ways to teach kids about money than just opening a savings account and forcing them to save.
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