Carol Ehlers, Human Sciences Specialist, Family Wellbeing
Halloween, with its costumes, decorations, and the exciting tradition of trick-or-treating, isn’t just about scares and sweets. The National Retail Federation reports that some 72 percent of us plan to celebrate, spending a record $104 each which represents $11.6 billion nationally.
The financial advisor in me is always thinking about how to help people of all ages develop good financial habits, and this holiday offers opportunities to teach essential money lessons. See how the timeless activity of trick-or-treating parallels with real-world financial wisdom.

1. Candy as Currency. Much like money in the adult world, candy acts as a form of currency on Halloween night. Children can quickly realize the value of their accumulated treats by comparing their holiday stash to current retail prices.
2. Supply and Demand. Some candies are more popular and in-demand than others. When kids notice that a particular candy variety is low in supply but high in demand among their peers, it mirrors real-world economics. It is a practical way to introduce the basic principle of supply and demand. Items in short supply with high demand often have greater value.
3. The Trade Negotiations. Post trick-or-treating candy trades are a Halloween staple among siblings and friends. This trading floor activity can be compared to a stock exchange or barter system. Kids learn negotiation skills, the art of valuing assets (candies, in this case), and making deals. This hands-on experience can introduce discussions about investments and the importance of making informed financial decisions.
4. Saving for Later. After the initial excitement, many kids decide to save some of their candy for later, teaching them patience and delayed gratification. Encourage planning for the candy to last until the end of November, or through the winter months. Doing the math on how many pieces per day can be consumed to allow it to reach a certain future date is a good lesson.
5. Taxes. The “Candy Tax” is something you may have heard of. This idea goes beyond parents just syphoning off some of the goodies for their own enjoyment. Kids can fill out this Candy Tax Return (https://go.iastate.edu/CANDYTAX) to calculate their taxes. Here is an age-based basic tax bracket chart which can be adjusted accordingly. Also encourage a Charitable Deduction – a piece shared means another piece not taxed.
6. Spending Rate. Many kids may be tempted to eat all their candy as quickly as possible. Like spending your cash too fast, this may feel good in the moment but is a poor decision when you consider your long-term wellbeing. In the case of Halloween candy, establish a candy budget to avoid ending up with a bad stomachache.
7. Managing Risk. Talk about the importance of protecting what is earned. Like a reliable custodian, financial advisor or bank, it is important to find a safe place to store your “money”. In real life you must protect against scams, theft, fees and defaults. For the candy stash, pets, siblings, and the sun may be important risk factors to consider.
   Halloween carries several parallels to the finance world. By framing trick-or-treating activities in the context of a learning opportunity, parents can instill essential financial management skills in their kids, making the experience a sweet lesson.