Finances for the Kiddos

For those of us who have kids, and who have had a hard time with our own finances, there is likely a need for better teaching to our kiddos as well. If we lack financial sense ourselves, then we are not going to be able to teach good financial sense to our kiddos. That said, if you are like my wife and me, then you have figured out that you messed it all up at some point and now you are digging your way out, so the kiddos actually have a pretty good example to follow.

But you know by now that finances don't get learned through osmosis and you have a suspicion that there might need to be some purposeful teaching? And you would be right.

In our house, we do a mini-version of the envelope system. When our oldest turned 6, we had her color three envelopes. I outlined the words, "Giving, Saving, Spending" on each one and she colored them in with her vast array of markers and crayons. The basics of the idea worked really, really well, except that she kept losing them and was playing with them all the time.

So, Crystal sacrificed some of her jelly jars, and stamped the labels neatly. This was great too. Whenever the money came in for her, she would parse it out into the jars and use it where it goes. (She sees Mommy doing this all the time, so she really took to it.)

There were some problems, however. The little guys are pretty generous it turns out, and will gladly give all of their money to their friends or to Sunday School; and don't get me wrong, we love that, but it wasn't really helping us to get the idea across for a while. So, we moved the money to the kitchen so that she didn't just dig it out to show her friends, or leave it out where the babies could swallow the coins.

Now, she is getting older and the jars don't really go to the store very well, so having retired one of our Dave Ramsey Envelope Systems, we gave her one of those to carry around. So far, so good.

Besides the giving and spending that she seems to be learning well, we hit the saving/earning thing hard at the beginning. She wanted a bigger bicycle, having grown out of the one she had been given when she was four. Mommy and Daddy were still mired in Baby Step 2 (Pay off all your debt, except the house) and though we were willing to do the garage sale thing to get her a bigger bike, we sort of leveraged this back to her to earn money to buy her own bike. She could do a few chores to earn some money from us, but quite honestly, we couldn't afford more than a dollar here and there at the time, and she wasn't quite big enough to chop firewood.

She thought and thought. Somehow Grandpa got into the picture and hired her to pick pine cones out of his lawn. One Saturday I dropped her off and went back home to do my own chores, and then went back after getting a disappointing call from Grandma. I guess she worked pretty hard for about twenty minutes, then got pretty bored. I think Grandpa tactfully let her know that he wasn't really happy about this and restrained from paying her fully, for which I was grateful. I gently scolded her on the way home, knowing the story, but reasoning it out verbally with her so that she understood why 2 1/2 hours of that poor of work didn't make her much money.

Clearly, she was disappointed, and the next week she offered to try again; and of course Grandpa helped out again. She did much, much better. When I went to pick her up, I could see the difference in her face and though Grandpa probably over paid her, I was very glad to see that she got the lesson.

Picking pine cones is not exactly a fun job, she decided, and this prompted her and Mommy to come up with other ways to earn money. So, they baked cookies. I don't know, but I suspect that they probably called around and asked at church if anyone would like to buy any. Once people knew what she was doing, they jumped in from all over! In about two Sundays she had more than enough money to go right in to Walmart and get that bike she had picked out! (I think we even charged her for the materials, so she got a good dose of profit/loss! I might be mixing that up with the lemonade stand that came another time though...)

I was so proud of her! She was so excited! I advise you parents to push your kids a little bit here. If you can afford to pay them for extra chores, then fine, but maybe let them think of creative ways to do their own earning. It is a valuable time, and this is one important thing that you can teach them early.

Don't give in at the store when they are two dollars short at the store, either. You don't do them any favors by covering the sales tax. Teach them what it means to truly buy something. Maybe even let them waste their money on something too. Then, when they find something that they REALLY want, but can't afford, use the moment to teach them that they decided to spend that money already. (OK, don't surprise them. I don't have the heart to lead them blindly into that one either. But give them a warning and if they still buy the piddly thing, then watch for that moment...)

Teach them by example, and teach them by instruction what it means to afford something and how to get a deal. Teach them to give - don't just hand them a couple quarters on the way in to church, let them give their own coins. Teach them to save for something "big" like a bike.

There are a lot of cool little books and teaching things on the Dave Ramsey site for this, ranging from pre-schoolers to teens. I haven't seen much of them, being a little too cheap to buy them, but the principles are the there.

God Bless!