I will be the first to admit that I used to be terrible with money. In fact it has really only been within the last few years that I have learned about how to handle my money in a way that gives me a sense of financial freedom. Coming from a very affluent family and growing up in a very privileged environment, I never really learned the concept of spending vs saving. Money was just always… there. I know my family – mostly my maternal grandparents – were doing what they thought was best by giving me everything I wanted… but it taught me nothing about financial independence and how to handle money once they were gone.
Like most parents I have worked hard to give my girls everything they have ever asked for – not letting them see when or if I was struggling financially. Mike and I didn’t talk about money with the girls – we always thought that was an “adult issue.” Their father however has no problem constantly telling them he has no money, which for the record I think is JUST as harmful as giving them everything they look at. But that is a whole ‘nother issue.
Last week the Teen asked for a “raise” and to start handling her own allowance money. She scribbled down her “budget” and spent a half an hour trying to convince me that she was responsible enough to handle her own money and pay her own “bills.” The way we have it right now, she is in charge of dishes and laundry, and I pay her bills – except that I often have to remind her to do her jobs and sometimes let things slide. I realized though that by doing this, I was creating the same dynamic of her just knowing that money is always there and giving her no real concept of what it requires for the money to actually BE there.
I also realized in her “budgeting” that though she has savings listed, her calculations are off…. and its my fault. I have told her I was paying her “$50 phone bill” each month… when in actuality its $53.95 with taxes. So when I asked her if the extra $3.95 was going to come out of her iTunes money or her savings account… well, I will let you guess which one she chose.
CNNMoney suggests that to teach kids about money you should “pay them” – meaning establishing an allowance system – even early on and giving them control of how they choose to spend said money. But that leaves the argument of whether chores should be “paid jobs” or a part of contributing to the household. And if chores are more about contributing, what tasks should in fact be paid jobs in order to link that you must work to earn a living and “money doesnt grow on trees?”
So we are changing it up, and starting November 1st the Teen will be in charge of her own money -paying her own “bills” – to see how it goes. I havent worked out all of the details yet – like will I pay her daily when and if she does her “job” like a real employer would, or whether to give it all to her up front and then expect the jobs to be done because shes a part of this family… but I guess we will figure it out.
How do you teach your children about money? And how were you taught as a child?
Information contributed by Genworth Financial. For more information about financial services visit the Genworth Financial website.