Most everyone wishes they managed money better than they do. It might be fair to say a healthy percentage of the population never had formal training from their parents in exactly what to do with money beyond opening a checking account down at the local bank. How to save, how to invest, and how to spend wisely came down to however we felt like doing on any given day of the week.
Consider for a moment, who will teach your children if you miss the opportunity to do so. If society is your answer, it’s time to get on the ball because society’s broke. And there is nothing like getting financial advice from a broke person. Implement a few steps to help your children understand how money works. If you aren’t sure where to start, try these to begin.
Principle 1: Money must be earned. Show your children money must be earned, and that unfortunately on this planet, money doesn’t grow on trees. Implement a chore chart on the fridge. Pick 2 chores which are age appropriate for each child to complete, simply because they are part of the family. Pick another 2 chores, which upon completion, your child earns cash on the spot. It can be $1 or even a quarter per chore for little ones. Chores can range from taking their shoes from the front door to their room, picking up toys, or taking out the trash for older kids.
Principle 2: Money must be given. Show your children money must be given. Once they have earned a small amount of cash, teach them to give a specific percentage to a church, charity, or other good cause. We suggest 10%, but it can be any percentage you deem appropriate. Learning to share at a tender age will mold their character for the better.
Principle 3: Money must be saved. Saving is frequently a task we as adults often forget about. Teach your children while they are young, and they won’t depart from it when older. Get a clear plastic container such as a large empty apple juice bottle with which to collect the money they save. Crumple each $1 bill to fill up the bottle faster, but also to help your child visually see the money grow.
Principle 4: Money must be spent. Spending is healthy, as long as it isn’t the only thing we do with all the money. Choose a specified percentage to spend which you deem appropriate. Whether the goal is to purchase the latest video game or package of Milky Way bars at Walmart, post a photo of the anticipated purchase on a second clear bottle so the child is continuously reminded of the goal. Once the amount of money is reached, go and spend the cash together on the item while simultaneously emphasizing that the feeling of reaching a financial goal is worth the wait.
With these steps your children will be well on their way to being wise with money when it comes to giving, saving, and spending. Good luck to the many great lessons ahead!