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Monday, September 17, 2012

Teaching Your Children About Money

I had a nice visit with a younger mom yesterday and one of the things we discussed was how to teach your children, younger and older, to be responsible with their money.  Here's what we have done in our family...

Teaching Kids About Money

We gave small allowances when the children were very young, say ages 5-12.  Small means $5-$10 a month.   They were still required to help with household chores appropriate for their age for which they were not paid.  Everyone in the family needs to help around the house i.e. make your beds every day, laundry (including putting it away), start dinner occasionally, etc.  Once they hit age 12 (no real magical number here, just what I chose) they no longer got an allowance and we opted for them to get paid for harder outdoor chores such as yardwork, weeding, mowing the lawn.  This is what we have continued to do even now.

Along the way, as they started driving we had them pay a portion of their part of the car insurance... $50 each month.  This was not so much  of a stretch for them since they both had saved their $$ well and spent wisely, shopping for bargains like I do.  By age 16-17 each had a part-time job (my older started at age 15) and began saving for a car.  No, we do not buy cars for our children.  Our older one bought a used Honda for $4,400, the exact limit of pricing that we had prayed for once you add in tag and title.  Our younger is currently saving for his car now. In the meantime we share my car.

They both pay for special activities and if they want a designer shirt, I tell them we'll cover $___  and they can pay for the rest. They buy their own movie tickets and meals out (unless it's a family outing), Christmas gifts, outings with friends, etc.    We provide all food, gas (reasonable use) and clothing as long as they live at home.   I always told them when clothes shopping, "be reasonable and careful in your purchases".  They know that means that extravagance will come out of their own pockets.  

I also taught them how to sell on Ebay and Amazon so they could also make a little extra $$ from home as well.  Our older son moved out when he was a junior in college and now has graduated college debt-free with money in the bank and is now working full-time. Believe me, he knows how to handle his money.  We did NOT pay for his food, rent or gas while living away from home since he could live at home for free.  Moving out before being a junior was not an option either.  That way, he/they have time to save their $$ and work out their budgets well in advance of the big move.  He has told me numerous times that he is one of few of his friends who ever had any extra $$ for fun while in college.

I highly recommend  teaching your children good stewardship while they are at home, drawing from real life situations and helping them be responsible for paying for things that they want to do.  They are not so quick to spend $$ when they recognize how much things cost and equate it to what they earn [1 movie ticket = one mowed lawn]  I am thankful that both of our sons are responsible and careful with their money, yet still generous.  What parent could ask for more than this?

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