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?
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Our oldest is only five years old, but I really want to implant some kind of allowance system for paying them for chores.
SO many opinions on this and I still don’t know if my husband and I are on the same page with this. What I do know is that I will be forever grateful to my dad. When I was 12 and wanted a better bike than the Huffy he wanted to get me at K Mart he told me to “Get a Job” and buy it yourself. So I did. Started babysitting and got a chambermaid job and bought my bike
This also lead me to understanding the importance of a good work ethic along with $$ didn’t come easy and I learned how to save. At the age of 18 I purchased my first house. With my own two kids I have one who likes to save and the other who likes to shop. They both have “chores” to do daily as being a part of the family and their cell phones are paid for. When they do want to earn extra $$ they will do extra chores. My daughter who is 11 (the spender) even started her own business making pins http://www.meredithsmarketplace.weebly.com to check out her creations.
Great Question Lynsey!
Elizabeth did Dave Ramsey’s Financial Peace Junior, best 20 bucks I ever spent. She asked questions often mostly “why are you making me do this” and I told her it was because I was NOT paying her mortgage when she was 30 and I wanted her to have a good concept of money and to understand that it is earned, it is finite, and it is important to save and invest in your future. I have always been REAL with Elizabeth when it comes to money – well with all of them really. They know where the budget is on the computer, they know about Gazelle Intensity and paying off debt which I’ve told them often I never want to see them in credit card debt. Emma is still at the age of the infinite debit card though “just put it on your debit card” is a phrase I hear often – explaining to her how that works is just not helping right now but when it’s her turn for Financial Peace Junior, I am hoping she understands.
As you know, I did not come from an affluent family but from a poor one and that is as bad as coming from one (at least from your perspective) It took me a very long time to unlearn the concept of “money is here spend it until it’s gone” because that is what would happen. The Social Security Checks would come and we’d be off to buy groceries, pay bills, do whatever until there was no money left. It was gone just as fast as it came in. I carried that “concept” with me for over a decade and then one day I just sort of woke up and said “no more” and that was it. NO MORE
When my husband was a child his parents matched every dollar put into his savings account. So if he put in 2 they put in 2, savings was 4. Also he was given the opportunity for extra chores, ie clean out a closet..the chore would be worth $10 dollars or $20 savings. When he graduated high school he had saved over $20K! They started when he was 5. I totally need to do that with my kids.
Chore’s are required around here… and alot of them. My daughter does everything I ask her sometimes I have to ask more than once, I consider that normal. Her grades are all great! so ii consider that being resposible, I pay her phone bill. That’s her only bill. Mow that she got her official driver’s license 2 day’s ago she will be responsible for gas most of the time. She made 20.00 babysitting Tuesday night and She will prob. babysit tonight. Most likely this weekend also. I feel like my daughter helps so much, does well in school, and takes care of the dog’s I can atleast help her out with 10.00 or 20.00 buck’s a week. And she doesn’t always ask! I would remind her if she does forget to do her chore’s that the phone bill comes around every month so stay on top of what you ask. I’m sure you do a great job!!! As kid’s get older they do realize the value of a 1.00 and when it’s their money they are spending boy are they cheap!!!!
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Lynsey -
Great question – we are still in the “just making ends meets” category. However, since I started selling the “Dave Ramsey Financial Peace Foundations” – I have really learned quite a bit – still have a long way to go. We have used this in our homeschool for our “seniors” so that they know how to use money correctly (and it is a full high school credit!). I hope to use this with our younger children at the beginning of “high school” instead of waiting until the end!
I look forward to seeing what other moms have to say!
~Belinda