[Nimbus]

I've been reading a lot about this lately and wondering how MDC momma's address teaching their kids money management skills. A few specific questions:
1. Do you give your children allowance? At what age did you start it? Is it associated with household chores? Are they allowed to spend it any way they like or do you have allowance guidelines?
2. How do you handle money yoru kids received for holiday gifts?
3. Do you involve your children structuring your household budget? How?
4. How do you incorporate lessons about money into daily life -- grocery shopping, eating out, etc.

Our little one is too young yet for allowance, but I know there are other ways I could be teaching him about the value of money. I'd love to hear how you all do it.

 

[mightymoo]

I'm interested in this thread. I'd say I don't do anything yet - so answer to 1, 3 and 4 are nothing at age 2 and 4.

But 2 - we put currently all gift money into a savings account in the kids names where I am also on the account. Not sure what my plan is for that, but I'm thinking this is good practice money later for them to learn on, probably in their teens.

 

[vbactivist]

In the Book "americas cheapest Family" there is a chapter on how they handle money with their kids. It made a lot of sense to me, and I think we are going to try implementing most of their ideas with our kids.

Try getting it from your library.

 

[CaraNicole]

i've already started an allowence for ds...it was actually started before he was born...ihave this huge bank that we put money in and when he is old enough i am going to let him play "banker" i do think he will blow his money the first few times but i want to lead by example and i think he'll get the hang of it, i want to do a more "hands off" approach...i don't know how i am going to do it after he's 10 or so...hmm...

 

[reducereuserecycle]

DD is sooo young now, but in the future, I want to get her one of the 3 setion banks (or better yet, make one). It had 3 buildings, a church, a bank, and a store to represent tithing, saving and buying. that will incorporate my values into her money management training. also, i want to teach her lots about credit cards-something my parents never taught me

 

[velochic]

I think it's worth it for every parent to read a book about raising financially smart kids. There are many books out there:

Kids and Money: Giving Them the Savvy to Succeed Financially

Raising Money Smart Kids

Growing Money: A Complete Investing Guide for Kids

The Totally Awesome Money Book for Kids

And the list goes on. I've read a couple of these and although the advice is very common sense, it's something one might not think about right off the bat. You'll also get different advice from book to book, so it's one of those things you want to take what works for you and leave the rest.

1. We don't give dd (5 yo) an allowance and I'm not sure we ever will. Nobody in the family gets an allowance, actually. I know some families use this method for money management for everyone including the parents, so in that case I might. She has certain chores she does to help around the house and it is not tied at all to earning money. Any purchases she wants to make, we talk about it and decide together if it's a savvy purchase (even if it's a want instead of a need).

2. She doesn't get money as gifts (that's just not something our family does).

3. We don't really have a budget. We allocate to savings & investments, then pay our bills and buy our needs (or wants, although dh nor I rarely make frivolous purchases - if we buy something it's usually for a good reason)... whatever is left over goes into savings each month. But we do talk to dd about what our bills are and why we do not just buy something because we "want" to. We tell her about the money we save and invest and why we do so. She has a change jar into which we put our pocket change every night. She knows this is savings that cannot be touched for many, many years (until she's 18).

4. Dd rarely grocery shops with me, but when she does, I do teach her about comparison shopping. I show her that some things might seem cheaper, but it might be of a lower quality or that we would be buying too much to use up before it goes bad. I don't do this purposely, just when an opportunity arises. If I were more conscientious, I could probably come up with more lessons to give her when we're shopping, but I don't often think of it at the store... just want to get out of there.

I have also started talking to dd about investing. This may seem young for this, but we've recently had an opportunity to talk to her about this and although a lot of it went over her head, she's starting to understand that there are ways of making your money work for you. I don't think you can ever start too early.

Good luck... I hope you find something that works for your family!!

 

[Belleweather]

We're just thinking about beginning an allowance in the next year or two. My thought is that at first, we're just going to focus on giving him money so he can learn what it's about; things like what the coins and bills mean and how count it and to buy things. We'd like to start that at about 3.

I think it's important not to tie my son's allowance into chores he does around the house. Everyone in our family should get a little money as pocket money, and should do chores as a part of being a member of the family. But I think we're trying to teach two different lessons, one with chores which is about community and working together and respect, and one with money and I think it muddies them to smush them together.

I don't know how we're going to handle the rest, as our kids are very little. Off the top of my head, I would put money gifts into a savings account and let him have the choice as to what to spend it on (while trying to encourage buying a big gift rather than many small things like candy). I don't think that we'd let our children have a say in the household budget -- our household budget is complicated and I think it might be too scary. We do plan to give our kids bigger and bigger amounts to handle in their own budgets with increasing pocket money and the things they're required to buy with it, giving a set amount for clothes for school/summer, christmas presents, or activities so they get a chance to see what it means to have a personal budget.

 

[Nimbus]

Thanks for the replies so far. I've seen a couple of the book titles mentioned but haven't taken the time to dive in and read yet. I think we will probably go with an allowance at some point -- maybe age 5 or 6. I don't want to tie them to chores -- we all need to contribute to the upkeep of our shared home, each according to ability. We'll probably provide some structure for the allowance but be hands off with the 'spend' portion, giving our kids the opportunity to learn as they go.

I hadn't thought about the importance of teaching about credit cards. Of course, most people don't even use cash anymore. Wonder what age the credit card education should start and how?

 

[Mallori]

While teaching them money management, teach them the lost art of bargaining. We have fun with that one.

 

[Leylla]

For DS1 we do a "checkbook" I printed him up so OBVIOUSLY fake checks, from the Bank Of Mom, and made him a register and gave him an old check book cover.

His allowance is automatically deposited Thursday night at 8:00pm. (Amazingly when my own check hits the bank) He is responsible for writing me a check for his tithe, a check for his savings, and then he is responsible for keeping up with the balance. And the checks he writes me, like for savings I will go put the money in his account, and for his tithe I put a check of mine in the plate for him.

We expounded this to include payments for extra chores, (helping dad clean out the garage, changing diapers, helping me put up dishes, NOT his regular chores) And he can spend money at home too. For instance getting out of taking out the trash costs $1.00.

It really has helped him see not only how checking accounts work, (so we can avoid the "I have no money" "well just write a check mom!" conversations) and it allows him to manipulate his own money.

I will also match charitable contributions 100%. If he decides to donate $10.00 to a local chairty, I will donate $10.00

But I have to watch out, b/c he's gotten up to $100 before.

Steph

 

[OrganicallyGrown]

Interesting question. We are a unschooling family and our approach to money is the same as our approach to other aspects of learning....

First, I would highly recommend a book called 'Rich Dad, Poor Dad' by Richard Kiyosaki. It has changed my view of money in general and has been helpful in developing a healthy relationship to money which I hope to pass on to my children.

I have a 5 yo and a 16 mos old. So, the following really only applies to the 5 yo.

My son has his own 'business'. We live in Sitka Alaska, home to many cruise ships in the summer months. My son's business is a cookie-selling business. We take him seriously about it and basically approach it as a legitimate business. He is learning how to make change for customers, count and see money (and lots of it btw), and choose how he spends it. He pays me for the ingredients and has bought the permit for his business himself.

I buy my son what he wants...which generally isn't much as he has never been deprived so doesn't have the 'more, more, more' mentality. If I don't want to spend money on something, he buys it with his own money.

As he gets a little older and has more money, we may discuss investing it if he is interested.

I think the most important point is to get accross to your kids that there is as much money as you want as long as we are creative in finding ways to bring it into your life!

I'd love to hear what others think of this philosophy

warmly,
jenn