By: Elizabeth Redhead
Kriston
The
other day my oldest daughter walked to the corner store and bought herself deodorant
using her own money. In that moment, I
felt victorious!
Of
course I would have bought her deodorant, but she never asked. All of my years
of teaching her the value of money and financial responsibility paid off. She just might be ready for the real world.
Every child needs to
learn the value of money. By starting to teach them at a young age, we can head-off mistakes in adolescence and adulthood, mistakes which bury them in debt and
cause financial ruin.
“Children
should understand that things like water and heat aren’t free.”
Modeling
good money management and talking to your children about how you spend and
manage your money are key in teaching fiscal responsibility (this does not mean
you have to share actual dollar amounts). Children should understand that things
like water and heat aren’t free. They should understand that we work to make the money that pays for the
things we need.
The
key to success in this endeavor is to ensure
your children have their own money to manage. Because every family member
has a responsibility to maintain and care for the shared home, the money children
receive should not be directly related to basic household responsibilities (chores).
“Paying
children for chores teaches them that they have a choice”
Paying
children for chores teaches them that they have a choice, that it is not a
reality of life. Rather than pay for chores, provide each of your children with an income. Starting somewhere in
the preschool years, a child should be paid weekly one dollar for each year
they have lived. (Yes, they get money just for being alive. Stick with me it
will make sense later.)
3 Categories of Pay
2. Save: The child saves 20% of the income. Work with your
child to decide how best to invest this money. Savings accounts accumulate and teach
about earned interest. Buying stock and watching it gain or lose value prepares
her for future investing. Place money into a TAP 529 or other mutual fund
accounts. Buy bonds or life insurance. The experience of saving and
investing applies math skills and teaches money management.
3. Donate. The child donates 10% of the income.
Once the money has accumulated, help your child donate the money. Talk about
options in categories like people, animals, or organizations. Research the charity.
Teaching philanthropic ideals at a young age will foster empathy and
philanthropy.
4 Stipulations
stip·u·la·tion
Function: noun
: something required as part of an agreement
: something required as part of an agreement
1. As
your children get older and no longer rely on concrete evidence that money
exists, switch from cash payments to a ledger system. In today’s world our money is virtual. Learning how to
manage money from a spreadsheet is harder and truer to life.
2. If your child does not complete her daily
responsibilities (chores), she will have to pay whoever completed the chore for her. These fees should be
predetermined. Every person has the
right to not complete her own chore if she finds another person willing and
able to complete it. She can barter by swapping jobs or pay the other person
the agreed upon fee. If no one agrees to take over the responsibility, than the
person assigned the job must complete it. If she refuses, she must pay double and face a consequence determined by the
parent.
3. The parent may restrict the child from buying things that
do not fit in the scope of the family’s values.
If the child wants to purchase an item that is not age appropriate or is
not allowed in the home (candy, toy guns, etc…) than the parent can veto the
purchase with a clear explanation of why the child is not permitted to make the
purchase. If the child wants to buy an item that seems excessive or frivolous
but does not go against the household rules, the parent should discuss the pros
and cons of buying this item. The final
decision is the child’s. The child may regret the purchase. This is part of
the teaching process.
4. Your child should be able to earn extra money by
performing chores outside of the scope of daily living. Washing dishes, taking
out the trash, folding laundry and caring for the family pet are things that
need to be done. Washing the car, scrubbing the inside of cupboards, and painting
the fence are tasks that a child should be paid to complete. This teaches them to value themselves and their
work. It teaches them to expect others to value their contribution. Work
ethic and knowing that your effort deserves reimbursement are complicated
lessons to learn and to teach
We
all know that financial stress is one of the most common and most destructive
stressors of relationships. By making thoughtful attempts to introduce our children
to earning and managing money we will set them up for a life of success.
By all
means pay for your children’s necessities like deodorant, but if they tell you “I
got this mom,” relish in the fact that you have done a great job of teaching
your child that nothing in life is free.
No comments:
Post a Comment