‘Cash or candy?’ How Halloween can help kids learn about money

Children await candy handouts during the annual Halloween Parade in Johnstown, Pa., Tuesday, Oct. 25, 2022.

Anderson Kegg of Westmont, left, and Max Volocko of Middle Taylor Township, both age 6, await candy handouts during the annual Halloween Parade in Johnstown, Pa., Tuesday, Oct. 25, 2022. Can Halloween candy be used to teach children about finances?

John Rucosky, Associated Press

There are just a few days until Halloween, and trick-or-treating is about to begin.

Trick-or-treating has been a tradition in the U.S. since around the 1950s but has roots that dig deep to almost 2,000 years ago, per the History Channel.

Now in the 21st century and amid inflation, a modern spin on trick-or-treating makes sense.

Experts in finance are talking about how trick-or-treating isn’t only a fun practice for kids today, but how it can be a tool that parents use to teach good personal finance principles —like budgeting, saving and paying taxes.

The ‘dad tax’

“Children have natural money personalities, and observing the way they handle their Halloween booty is a great learning opportunity for parents,” Luke Erickson, associate professor of personal finance at the University of Idaho, told WalletHub. “At its most basic form, children are either naturally ‘spenders’ or ‘savers.’”

Erickson said that this natural money personality should influence teaching methods.

In his own home, he deducts a “dad tax” that amounts to a piece of candy or two per kid for his work buying the costumes, fixing costumes throughout the night and driving kids around.

“You would think I was taking their left arm the way they react to it,” Erickson told WalletHub. “By the way, it is not all that dissimilar from how adults react to the IRS. My guess is that these folks simply were not conditioned earlier in life to pay the ‘dad tax.’”

Sorting and planning for younger children

For younger children, a tax lesson may not be suitable. Martha Buell, a professor of human development and family sciences at the University of Delaware, told WalletHub that “lessons on personal finance need to be age-appropriate.”

Basics skills for younger kids — like math, logic and decision-making — can be strengthened through sorting candies from either biggest to smallest or separating toys from candy, Buell said. To help with planning, parents can limit how much candy kids can eat and have them plan out when they will eat it on a calendar.

The ‘cash or candy’ technique

In Seattle, Chuck Jaffe — a financial columnist for the Seattle Times and host of “Money Life with Chuck Jaffe” — opts to give the young kids candy and allows kids in third grade and up to choose between “cash or candy,” per the Seattle Times.

Since 2016, Jaffe has been giving kids the opportunity to trade candy for cash by implementing trade offers but changes it up every year to keep things fun and interesting.

Like always, this year cash will be involved, but — he wrote — children will have the option to have three candies, a $1 coin, trade two candies for an envelope that has up to $5, or trade five candies and play a game of chance.

With these more advanced options, Jaffe writes that he’ll be able to see if kids are really affected by inflation and if they know the value of a dollar.

“Kids try to calculate every angle — they want to make good choices, they’d like to win — and making them now on something fun will only help them later in life when the stakes are much bigger,” wrote Jaffe.

Jaffe said by teaching kids the value of money and giving them foundational principles of personal finance, your 2022 Halloween season will be “a lot more valuable and memorable than normal.”