Financial Literacy Lesson: Teaching Your Kid About Bargaining

A 13-year-old entrepreneur went viral on the show Shark Tank thanks to her surprisingly acute negotiating skills. The lesson for the adults was clear: never underestimate the ability of young people to learn smart money management skills.

Parents with young kids bargain with them all the time, whether they know it or not. Sometimes you have to say no, but other moments provide learning opportunities that will help them build their own analytical skills. So why not bargain intentionally in a way that teaches your child smart lessons and also reinforces your values and boundaries?

Smart Advice for Bargaining (or Negotiating) with Your Child

Bargaining – or negotiating – starts at home. If you have more than one child you will likely see mini negotiations play out before your eyes every day. These moments offer parents a gold mine of learning opportunities that can benefit everyone involved.

Lesson 1: Don’t be overprotective. Teach kids to negotiate for themselves.

The first thing to know is that being over protective or constantly giving in to their demands won’t help them develop good skills in the long run. Look for common everyday conversations to start laying the groundwork for your child to express rationally what they want while offering something they are willing to give up.

Lesson 2: Teach them about offers and counter offers to get compromises

All bargaining is about finding common ground between two parties in low-stakes situations. When raising a child, it’s also important to maintain other rules, such as being respectful and using one’s words. Be sure you’re not setting a precedent that you won’t want to deal with later on, such as ignoring bedtimes.

Teaching kids about offers and counteroffers can help them understand the concept of compromise, which can be a good habit in business as well as building healthy relationships in life.

Use Their Allowance to Help Your Kids Learn to Bargain

As long as you’re giving your child a little money in exchange for lawn work or a clean room, some of those moments can be turned into negotiations. One of you sets the asking price (or asking chore) while the other responds with a more favorable ask. You can still end up giving and getting what you need in the end – you’re the parent! – but it teaches them to connect money with work and to think in a critical way. This exercise can teach parents similar lessons about bargaining with their kids in a positive way and getting the results they want, too.

How Can Parents Maintain Control While Bargaining with Kids?

It’s important to remember that you are still the adult in the room and should maintain control when bargaining or negotiating with the youngsters. Sometimes parents feel themselves losing control with a child who is asking for too much. One tactic is to take the conversation in the opposite direction when that happens. For instance, if a child tries to demand a bigger allowance or refuse a request, you can respond by shrinking the amount or suggesting an even less desirable request instead. That shows them that you are still in charge and that not everything in your home is up for negotiation.

3 Bargaining Lessons Your Kid Will Understand

Children learn financial lessons from the adults around them, even when we don’t know it. So why not share with them some of the smart spending lessons in our own lives? Chances are you bargain on a regular basis. Here are some examples of what that might look like that your child can learn from:

1. Search for good bargains on products together

We all do it in some form or another. Whether you compare unit prices in the cereal aisle or use a price comparison app, let your kid in on your secret! The lessons may be more basic for the young ones, while teenagers will pick up on the finer details and even share their own techniques for saving dollars.

2. Demonstrate smart negotiation tactics

Some people turn negotiating into an art form, and it doesn’t have to be about money. Bargaining at an open market might mean trying to get a lower price on an item with a small defect. Look for similar life opportunities that don’t involve money, as well.

3. Explain the importance of saving money

Kids can start learning the value of saving money at a very young age. When you discuss the basics of budgeting, you’re also teaching your youngster to be more financially responsible and successful later in life.

Teach Kids About Finance & Auto Services at CCEA Currency Exchanges Throughout Illinois

CCEA Currency Exchanges are a great place for parents to stop by with their kids. We offer many services that will be helpful for them to learn about such as auto upkeep, check cashing, and getting bills paid on time.

Find a CCEA Currency Exchange near you and stop by to learn more!