Like most Americans, my kids’ days are filled with school, sports and extra curricular activities. But no matter how busy my kids get, they are still expected to pitch in at home. Whether the driveway needs shoveling or the table needs to be set, if you live here and you are around I’m going tell you to help out. The response should not be, “How much will you pay me for it?” There are seven people that live under one roof, so if you live here you’re going to pitch in.
On the other hand, my husband and I believe strongly that it is our job to teach our kids how to handle money. We involve them in discussions from car purchases to vacations; and while we do not disclose specifics, we do tell our kids that, yes, we drive an older car so we can go on certain vacations. Or, we went to China to bring home their brother so no, we aren’t going to Colorado this summer. We never tell our kids we cannot afford something. It is all about choices in how we spend our money and that is what we hope to pass on to our children.
We’ve developed a system which has evolved over a good ten years. While we don’t pay our kids for every task they do, they are each in charge of doing certain chores that earn an allowance.
The kids in elementary school through middle school have a “worksheet” which is basically a colorful spreadsheet that my husband has created for each kid. On it are tasks with a dollar amount that are expected to be completed each week in addition to a few extras that we may ask them to do on occasion. These tasks include dusting, cleaning a bathroom, babysitting and lawn mowing, garbage, and vacuuming among others. With this system I have not mowed the lawn, dusted or cleaned a bathroom in years. Is it perfect? No. But I don’t let them get off easily either. I am not paying for sloppiness but do take age into account.
Every two weeks we sit down and add up how much they made. With that amount they are required to take 10% off the top for charity or church. They put 40% into their wallet to spend as they wish and the other 50% goes into their savings. Each kid has a savings account at our bank. When it gets to a certain amount we sit down with them, discuss the amount and talk about transferring some of it to their education fund. When the kids get birthday and Christmas money we often divide it in the same way unless we discuss a big item that they are diligently saving for.
We are hoping that our kids learn from the beginning that one should be generous in giving and saving for the future. In real life one does not take a full paycheck to the mall (or you shouldn’t). Instead, your money should be going to savings, to help others and then you choose to spend the rest on whatever you think is best. They have also developed some pretty great math skills along the way with all of the adding and dividing that they do.
Once our kids reach high school we eliminate the “worksheet.” We will pay them for babysitting or lawn mowing but everything else is expected to be done without complaint or payment. In exchange, we give our kids a debit card to be used when they go out for breakfast with their team or out to lunch with friends during school. This money is supplied by us but is expected to be used only when needed. They also use this card to get gas for the car or to pick up a gallon of milk. This provides additional practice with being mindful as they know we keep track of their spending online. They have summer jobs that give them the money they need for spending throughout the year but they know that whatever they are making in their high school years should mostly be saved for college. In addition, this year we began asking the high schoolers to give us $100 from every paycheck to be deposited into their college account.
Basically, we are looking for LOTS of practice in setting money aside for the future and less spending on stuff that they do not need. This includes lots of discussions on the difference between want and need. Discussions that I openly share with them when I make a new purchase for myself.
I remember when our oldest son was young, he would be frustrated with our system and ask what he would DO with the money we made him save instead of use all that he had earned on yet another Lego set. My response, “Someday you will use this money to buy yourself a pizza or pay rent.” It seemed so far away at the time but as we recently sat down and planned out his first year, we found that he will do pretty well. And, I hope, he has some ownership with his time at school knowing all of the years he set money aside to pay for what he will need.
What about your family? How do you teach your kids about money?