I watch as my children deliberate for what feels like hours over what toy they should purchase with the money they got for Christmas.
There is some arguing among the boys – typical sibling rivalry – and choices are made.
The boys return home, to a bedroom that is already littered with toys. Within minutes, I hear them talking about what they are going to buy the next time they have money. Two days later, they aren’t even touching the toys they bought.
I feel like we are failing our kids.
How on Earth can they be so phenomenally bad with money when we’re pretty decent as parents? How did they get so materialistic? So self-involved? So manipulated by marketing and pressured by peers?
We helped make them that way by not teaching our kids about money. We let the world teach them. And as you know, the world is a pretty messed up place. Sure, we have occasional conversations about making smart purchases or giving to others, but what we’ve been doing is clearly not enough for a sustainable future.
If we want our boys to be good stewards of their finances, we need to start equipping them now with the tools they need.
As some of you know, I’ve grappled with the idea of giving the boys an allowance for awhile. There are some parents who tie their children’s allowance to chores (no work = no pay), and there are some that give an allowance solely as a means of teaching kids to manage money. I’ve been so afraid of making the wrong decision that we haven’t done anything. And that certainly doesn’t seem to be doing anything to help my kids learn about money.
I turned to one of my favorite authors, Mary Hunt (of Everyday Cheapskate and Debt-Proof Living fame), for inspiration. Her book, Raising Financially Confident Kids, approaches teaching kids about personal finance in a completely different way than I had considered.
Hunt and her husband opted to give each of her boys a salary – a whopping $50 a month. There was just one catch: The boys had to pay for almost everything themselves. She gave clear expectations of what they were expected to buy with their salary and increased the salary (and the kids’ portion of the family expenses) as they grew up.
The move saved her money in the long run (because there was no Bank of Mom and Dad to run to when they needed something), and more importantly, it taught her sons how to budget effectively and become good stewards of their money. She even used her salary system to teach them to save and give!
I am truly fascinated with the idea of this approach to personal finances, and thoroughly enjoyed reading Hunt’s take on the experience in her book. Her approach creates kids who make money-management their personal responsibility.
But I’m not quite ready to give my boys (ages 8 and 6) the responsibility of that much money just yet. I know that I need to start on a much smaller scale so that they can simply work on the basic mechanics of handling their money, counting it, making basic spending decisions, etc. first.
In February we’ll start them on a small monthly allowance. It won’t be tied to chores. They’ll be expected to do the basic tasks they’ve been doing already. The allowance will be a teaching tool.
They will be expected to pay for some things that Mom and Dad often spring for – like candy or small toys at the store. We’ll also encourage them to be better savers and givers with their new allowance.
We will try that for awhile and see how that goes. Then we will consider the monthly salary idea that Hunt wrote about for our oldest boy.
I want to teach our boys smart money habits now before they learn bad habits that will lead them to a lifetime of financial struggles.
How do you teach your kids about money? Do they get an allowance? Are they paid for chores? Would a system like the one Mary Hunt writes about work for your family?
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