Growing up I don’t remember my parents teaching me too much about money. We didn’t get an allowance. They paid for whatever we needed plus a few treats here and there. When I reached 9th grade I got a job and pretty much spent what I earned after giving a portion to God. That much my parents did teach me.
As our girls get older (almost 6 and 8), Henry and I decided with the addition of chore sticks this summer, it’d be a good time to introduce a small allowance. I used to be opposed to paying kids to do chores around the house. I was raised that a family is a unit that works together – each cog putting forth effort to make the wheel turn efficiently. You did the job because it needed done, not because you were being paid to do it. As I thought about it though, I see the value in teaching kids early about money management.
Henry took the girls to target and bought these boxes for 50 cents each. The girls chose from some precut shapes I had on hand. We glued them to the top and labeled the boxes.
Although the allowance system started five weeks ago, I just now found the time to sit down with the girls to go over some simple money principles. For our purposes, we put money into three categories. Money they spend, save and give to God (or charity if you don’t tithe). As they get older we will open a fourth category for investing.
Because they are young, we are enforcing certain guidelines on how the money is split up. Ten percent goes to God. Forty percent goes to long-term savings. (My friend, Bridget, gave me the idea to not let them touch their savings until it reaches a certain amount and even then, they aren’t allowed to wipe out the account. They must save some for unexpected expenses, i.e., a neighbor’s broken window from an ill-thrown ball.) The remaining 50% they may use to spend on treats for themselves or others. Because their allowance is small, they will have to do short-term savings if they want something over $2.50 in a week.
Right now they are having a hard time figuring out that once the money is gone, it’s gone. Ainsley cried one day because I “didn’t tell (her) we were coming to a store today” when she wanted to buy something else with the money she’d spent the day before. As time goes on I anticipate the impulse buying will lessen and better spending choices will emerge. If not, Henry and I will be here to offer a little guidance.
What are you doing to help your kids understand the value of money?
I think this is a great idea. I do wish mom and dad would have shed the light a little in this area. Adam has taught me a lot hehe
(Mom if you read this, I think you did a good job on a lot of things and that you’re a great Mom. I love you)
Love this. We were thinking of starting something similar with our 3 year old (our 1 year old just likes to try to eat money at this point!) and I love the way that you are doing it with the three boxes. He may not “get” it completely at 3, but hopefully it will be the start. My parents didn’t ever really talk about money with me either and as soon as I got a paycheck once I started working, it would be gone in a few days.
That is a good idea. We don’t pay for doing shores at our house. However, my kids get pay on their interim and report card days, based on the grade they get, including the graded papers they bring home. We don’t pay for D or F[since none is allowed to have D and F]. If they get D or F, they will have to double pay the money back to us. If they are on the honor rolls, we’ll double the pays.
Most of their money are for saving. They are allowed to spend $25 each month but the shores have to be done completely without my warning. If I have to finish those shores for them, they will loose their shopping trip. I just give them simple explanation that I have to use the driving time for the cleaning time. Hence, I can’t take them. It works at our house. 🙂
I do something very similar with my boys. They get 30c per job, and split that into the three containers. At the end of the month they can take their spending money to the store. We haven’t done anything with the saving money yet, but when their containers are full, we will head to the bank with them to open accounts.