Financial Responsibility is one of the most important lessons kids need to learn. But if parents do not take the time to teach them, who will?
As a parent, we have many things to teach our children. We want for them to grow up to be compassionate, smart, well-balanced and happy.
It is also essential to make sure that they have the tools they need to take care of themselves. We remember to teach them how to cook, do laundry and run a household. However, did have you included money management in your lesson plan?
I will be the first one to admit that we’ve tried different systems. Some have worked and others – not so much. As our kids grow, the method used has changed along with them. We can’t use the same ideas we did when they were younger as they no longer work.
HOW TO TEACH KIDS ABOUT MONEY
IT’S NOT AN ALLOWANCE
When our kids earn money, we call it commissions. We never refer to it an allowance. As they complete their required work, they make commissions — just like would happen at work.
If they go above and beyond, they are eligible to earn bonuses. However, if they do the wrong things, they are charged fines.
It was important for us to use terminology our children will need to know as they grow. We created a chart based on our system of rewards. The list includes categories for responsibilities, bonuses, and fines. Here is how we apply each one.
Our kids range in age from 9 – 13. Each of them has different daily responsibilities. The types of jobs differ based on their age. For example, my older will be responsible for cleaning the entire bathroom, whereas the youngest is learning how to clean the toilet.
We ensure that their tasks are items they can do on their own. They include such as making your bed, put away your clean laundry, pick up your toys, set/clear the table, keep your shoes in your room, etc. Simple things. Easy things. We then assigned a weekly value to each chore for the week.
For instance, if they make their bed every day, they will earn $1 for the week. However, if they miss one day, they forfeit the entire value for the week. You can, of course, assign a daily cost if you would like – it is up to you.
Who doesn’t love a bonus? I know that my kids do! We’ve got a section on our form just for this.
All of us want to teach our children to take the initiative to help and not always have to be told what to do. We want them to see that the toys need to be picked up from the front room or that there are still crayons on the table at dinner time and put them where they belong — without mom or dad asking them to do so.
Also, they may earn a bonus without being told what to do. That means taking responsibility for the things they must do around the house. Tasks include making their bed each day, cleaning their rooms and the other chores they have were assigned for the week.
For instance, if our daughter always picks up something without being told each day, she will earn $3 for the week. However, if she misses a day, she loses the entire bonus.
These items earn bonus dollars. We assign a value to each bonus completed, which results in additional money for the week!
Ahhh, yes. The fines. If you are caught speeding, you may get a traffic ticket and get a fine. The same goes for our children.
Each of our kids always has an area with which they struggle. For one it may be fighting and another it is talking back. These events are assigned value.
Each time they do something that earns them a fine, they get a checkmark by that item on their chart. It helps them visualize what they are losing by doing things that mom and dad may find less than desirable.
Each Sunday evening is Pay Day. We don’t just add up what they’ve earned and pay them. Nope! We get them involved in the process!!
To start, they total the commissions they earned for the week. Next, they add any bonuses they are due. Then they get paid. But, we don’t just hand them bills. They need a mix of coins and paper money, as it may be needed for the last part of payday.
They are always happy to hold their money. But then come the fines.
We have our children each look at their charts to see the fines they had for the week. As we come to a fine, we tell them you owe me “X.” They must pull out the payment from the cash/change on the table and place it in my hand. We do this for every violation.
Fines are the hardest part of payday for our children. It is difficult for them to have to give us back the money they just earned. However, this is teaching them a valuable lesson — there are costs associated with doing the wrong things in life. We hope that this is helping instill morals and values that are so important.
HOW THEY SPEND
Once they have settled up with mom and dad, we help them count what they have left. Then, they place their cash into one of three envelopes: Save, Give, Spend.
They are required to put a select percentage into Giving and Saving, and the rest goes towards Spend. Give money is either donated during church on Sunday or given to charity. They can use Spend money on whatever they want (within reason, of course).
When our children want to purchase something, we make them take their own money to the store. I won’t forget the time our oldest bought a LEGO set with her own money.
She had just enough to cover the cost, which left her with around $1 – $2. She was very upset – but she learned a lesson. Just because she has money, she doesn’t have to spend it.
So now, we are heading out to the store tomorrow, and she has already shopped online to learn the prices and know what she wants to buy. She also already said that she is not spending all of her money on toys – which makes me so proud of her.
Get your free chore charts by signing up above. You can do what we did with ours too! We went to our local UPS Store and had it laminated. Now, our kids use dry erase markers on theirs. We just wipe it clean each week and use it over and over again! A simple way to save money on paper and ink.
As parents, we talk to our children about everything from strangers to drugs. But, many of us tend to forget about money and financial responsibility.
It is just as important as everything else. We feel good knowing that our children already recognize the importance of earning money as well as how to save and give and even how to spend it wisely.
We hope that by the time they are adults that this is normal to them and they will always continue to be wise when it comes to managing their money.