When it comes to money it is important that we as parents teach our children how it works and how to use it properly. I propose four paths to help educate your children about money.
Monitor the Path.
You as parent need to monitor the requests children make of you, and help them to monitor their own savings and spending. There is an quote that parents should remind themselves of as they manage their own wallet and monitor their children’s’ spending: “Ten dollars here… Twenty dollars there and soon you are talking about real money!” A disciplined budget should include monitoring and at times summarizing all of your spending in a log. Yes, help your kids to summarize all their spending so they have an idea of where their money is going … the lattes, sports drinks, apps, movies, clothes, and any other cash you might give to them.
Help give your kids a piggy bank savings mindset. Do you remember an old fashioned piggy bank? Well one of the beauties of the classic ceramic piggy bank with one thin slot was that you couldn’t get the money out without completely cracking it open. Use this mindset to encourage your kids to begin saving and to ease them out of the instant gratification mindset – have them save until they reach their goal for their big purchase and have to break the piggy bank.
Earn Their Way on the Path.
Don’t just hand out money to your kids. Give them allowance in exchange for chores to help them understand the concept of earning money. Perhaps they can start their piggy bank savings by working around the house. In our household our kids, after the age of five, were never too young or too old to do chores that contribute to the family. Picking up sticks and putting them on the leaf pile often began their earning career. Dishwashing and helping load and unload the dishwasher was always on the chore chart. Even things like helping mow the law on the family tractor mower was a way to earn money, and to learn some driving skills in preparation for the minivan.
In the summer time, my wife had a morning job board every day for all four kids as a way for them to earn the afternoon pool trip when came home from work. Then as our teens got older, at 15-16 years old, we did move them from household work to babysitting and that job at the ice cream shop dipping cones.
Make it Their Path.
Don’t buy the lie that your kids have to have everything that everyone else has – “but the Jones all have the latest smart phone introduced yesterday why don’t I!?”
Show your kids the costs of things, they won’t understand how much things cost and why they can’t have all the latest if you don’t teach them. There are some great ways to being educating kids on costs such as talking about the cable bill when they as for pay per view, or when you are out at restaurants discuss the cost of food at home versus the cost of food at the restaurant. Discuss too while you are out to dinner how the concept of tipping works and why it is important. Show them the tax on food or clothing purchases to teach them about taxes. Introduce these concepts early so they can begin to understand how these things work, and make it fun by having them figure out the tip the next time you go out to eat or have them shop for the pizza next Friday night since all teens are experts on sauce quality!
Ask on the Path.
Empower your teens to ask for things, don’t do it for them but teach them the importance of just asking. I always taught our four children to ask for things even when I could have done it for them. Some of the lessons they learned about money and value came from asking.
In conjunction with a business trip, one of my sons and I flew to Atlanta for special guys golf weekend. On the first leg of flights, my son noticed that there were drinks, meal, and leather wide seats up at the front of the plane. He was eleven when I explained the cost differential between First Class and Economy. I also explained to him how to enroll in the frequent flyer program and that sometimes an airlines’ frequent flyers receive a complimentary space available upgrade to those very seats but you have to ask.
He recognized the ask word because I had been teaching it to him for some time now. So on the next leg of our flight he marched right up to the counter with his golf hat and shirt on and asked, “ Ma’am my name is Andrew and I understand that there are times when there are empty first class seats and that you may offer them to frequent flyer members, may I ask you please if there is an empty seat available today from Washington to Atlanta? Oh and my Dad might need one too.” The woman at the counter replied, “ Andrew because you are so brave and asked so politely for as seat for you and your Dad I think we can do that.”
He was over the moon and I believe it was this instance that paved the way for him later in life to ask to be nominated to fraternity president, and then to ask for the scholarship to study abroad, and then to ask for his first job with Ernest and Young. I saved that boarding pass from that flight and look forward to giving it back to him shortly to reward him for asking his girlfriend to marry him. His biggest ask ever!
I pray that God blesses each of you today and as you continue to teach your children about money. That they may come to an understanding on how to monitor their money, earn money, and ask for the best financial life that they and your family deserve.