By Kelley Holland
October 21, 2016
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Your kids may think Halloween is all about spooky decorations and sugar highs, but it’s also a great time for them to pick up key personal finance skills.

Financial educators say children can learn about negotiating, relative value, the importance of saving, even deferred gratification—all without realizing they’re doing so.

“Every piece of Halloween is kind of a cool lesson in financial behavior,” says Patricia Seaman, a senior director at the National Endowment for Financial Education. “It’s just using candy instead of dollars and coins.”

The days leading up to Halloween are one opportunity for money conversations, says Judith Ward, CFP, a senior financial planner and vice president of T. Rowe Price Investment Services. For example, you can set a costume budget with your trick-or-treaters and then help them shop around for materials.

“Kids will understand that when you are saving for something there is a plan and usually a budget involved,’ she says. Followed by the inevitable need to make tradeoffs: “It might be more than you are willing to spend, so what’s the plan B?”

Any Halloween veteran knows the sinking feeling of arriving home after trick-or-treating and finding too many Tootsie rolls and too few Snickers bars in their bag. That’s where candy trading begins—and along with it another key financial lesson. Kids have to negotiate how many lollipops they’re willing to exchange for a Milky Way bar, how many Twizzlers equal a Reese’s cup, and so on.

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There also may be market quirks: If your daughter loves coconut but your son is indifferent, she could pick up Almond Joys for a song. She, in turn, might have a thing for gummy bears and be willing to trade away her M&Ms.

Either way, “you learn that the candy is only worth what someone is willing to trade you for it,” says Seaman. It’s a skill that could someday help your children ask for a raise, obtain a fair price on a car, comparison shop, and more.

There is also the matter of how quickly kids consume their candy. Some will plow through much of their stash before they even get back home; others will pace themselves, perhaps saving their favorites for last. Some research, notably the Stanford marshmallow experiment of the 1960s, has indicated that the degree to which children exercise restraint around temptations may indicate how successful they are in later life.

Another money lesson comes when kids decide where to trick or treat. Halloween night only lasts so long, so do they hit the short street where they know they’ll get a small quantity of high-grade goodies? Or target a longer street with more houses but a reputation for boring lollipops and candy corn? These choices anticipate decisions later in life about allocating time when the rewards vary.

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The day after Halloween brings lessons of its own. Many dentists and orthodontists offer candy buybacks, giving out cash or other (non-sugary) treats in exchange. Kids may even learn about taxation if parents decide to take a Reese’s cup from the bag in return for Halloween chaperoning.

Of course, while Halloween offers money lessons, you will be the least popular parent on the block if you turn the holiday into overt teaching time. Parents are often loath to talk about money with their kids in the best of circumstances: more than half of parents in a recent T. Rowe Price survey said they were at least somewhat reluctant to discuss financial matters with their children, and almost 30% were very or extremely reluctant.

Fortunately, you don’t have to have a money talk on Halloween itself, Seaman says. A better approach is to keep your eyes open and watch how your kids behave with their candy without judgment. Then you can gently remind them of those behaviors when a relevant money conundrum arises.

For example, say your child wants to save up for something but keeps frittering away his allowance. You can gently point out that the same thing happened when he nibbled on his Halloween candy while he was trick-or-treating, only to be disappointed when he assessed his haul at home. Then you can offer assistance, asking how you can help him develop the habits he needs to reach his goal.

“Halloween candy is a medium so you can totally learn something about your kids and yourself,” Seaman says. Who knows? You might even pick up some bargaining tips in the process.

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