How do you teach your kids the basics about money and get them off to a good start? Keep it simple by using three tricks to steer them in the right direction.
Coupons for Kids
I made special travel coupons for my daughter when she was young to both limit her consumption of “junk” food and to show her the value of money. The coupons were a fun tool and kids have an easy time understanding the concept. Really, choose a Happy Meal or trade in the coupon for $5. It was her choice. I don’t recall any family vacations in which she spent all of her coupons. Instead, she often cashed some of the coupons in for souvenirs or purchases when she got home.
How did the coupons shape her understanding of money? I’m not sure, but I have to share this story with you. When my daughter was 16 I gave her a VIP ticket to a concert given by her favorite singer. When I picked her up after the event she jumped in the car with a brand new $60 concert sweatshirt. I knew she didn’t go to that concert with $60 tucked into her pocket. It turns out the performer threw several of his towels into the audience. She caught one and found herself among rabid fans bidding to buy the sweat-laced towel. That’s how she paid for the sweatshirt, and more! Perhaps the happy meal versus $5 coupon had an impact after all?
The One and Done Rule
I always made the first purchase of high-end electronics and games for my daughter. After that she was responsible for taking care of them. If she lost or broke them, it was up to her to buy replacements. Of course, if she took good care of them and they wore out due to usage, then I’d consider buying a new version. Guess what? That never happened! Believe me, her electronics look mighty beleaguered! In the end, her lack of money and desire for electronics required her to be resourceful – she was a frequent trader at Gamestop, even though she lost value in the trade. But again, those were her decisions.
Creating Checklists and Using Stars
I grew up on a farm, where we were paid 1 penny per bale of hay stacked on the wagon and 50 cents for each evening milking cows. (For those who are pondering – if the sun shone, we made about 1,000 bales a day – which isn’t bad money for a kid!) We don’t have cows and while the work around the house and the yard are important, no one is going to starve if it doesn’t get done. I found that simple assignments, like cleaning the kitchen, were too vague to a child. In fact, as I write this, I may have to revert back to the checklist system for my 20 year-old! I had to specify each task – clear the counter, sweep the floor, clean the microwave. Once the tasks were completed, my daughter could stick a star on the task list. And it all had to be done by Friday evening. I paid her only when all tasks were completed by the deadline. Was I too tough? Time will tell.
Now What? Fun, Savings, Dream, and Charity Jars
What happens once your child accumulates a bit of money? Do you encourage him to take it to the store to buy a toy or spend it on candy? That didn’t happen in our house. Instead, I labeled four glass jars: Fun, Savings, Dream, and Charity. It was up to my daughter to determine how to distribute her $10 weekly earnings in the jars. You know what – if you let your child make these decisions, they might just surprise you. Mine put more money into charity than I had anticipated, and two years ago, she handed that charity money over to the director of her old orphanage in Ukraine! Did the money system work? Well, money went “missing” from the jars a few times, but I can definitely say the concept WORKED!
Just this last weekend, I helped my daughter open a Capital One 360 account so that she can transfer funds to retirement, savings, and fun accounts. And I am guiding her on using the Electronic Checkbook Register to create a realistic budget. I’m afraid, though, that she is not nearly as nerdy as her mother when it comes to spreadsheets and budgets!
My child is now an adult, and while I’d love for her to have her money issues resolved, I realize that’s an unreasonable expectation. If you read my bio, you’ll know that I made many mistakes and found myself living in poverty in my early 30s. I’m neurotic about giving my daughter basic money skills, but I know full well that she’ll make many silly decisions in the future. All we can do is give our children the skills and confidence to manage their money as they enter adulthood. Let’s give them time and a break as they figure out priorities and learn how to tackle their own issues. That’s how we all learned!