Teaching your children about money

[DCJenn]

We've started with basics- like when he wants to get something at the store that I haven't factored in, I always tell him that I hadn't counted on spending the money for that and we review what would have to be put away in order to get whatever X might be.

We also have a piggy bank that's divided into 4 sections, Save, Spend, Invest and Donate. Every time we have some spare change, we give it to him to put in whichever section he wants (we review what each means but I don't know how much he 'gets' it.) We have a 529 and we have a basic savings account so I plan on taking the piggy to the bank and having the appropriate amounts put into the accounts. I'll have him help fill out the deposit slips, etc. As he gets older, he'll be more involved in decisions about his money but we'll

My parents did a crappy job of teaching me about money so I hope that I can do better. My mom never wanted us to stress about it like she did growing up but it made me not really get a whole lot about it, either.

Jenn

Re: Teaching your children about money

What do you mean you are kidding about Quicken?

We have been haphazard in our allowance habits so this is more of a what would we do rather than what we really do. We intended to do $1/week and had lots of discussions about paying for chores (I think I posted a while back in the parenting thread). My feeling is the allowance is a share in the family "fortune" ( ) and isn't tied to chores or jobs. She should help out as a member of the family not because she is getting paid. When she is older, I could see paying her for extra stuff.

But...I don't think we have paid her allowance in months. She has almost $100 squirreled away. My plan -- that I still need to get to -- is to make Spend, Save, and Share containers for her. I think I would suggest that she divide it up rather than require. Here is more info:
http://www.sharesavespend.com/

I haven't looked at the site much but saw some of these containers at a friend's house. She made them out of ziploc containers.

We started allowance around 5-6.

[MDPhDWife]

Re: Teaching your children about money

I am glad this thread was started because I was going to start one, but hadn't gotten around to it. Teaching financial responsibility to my kids is HUGE for me. Being financially savvy has benefitted me a great deal and as I mentioned in the previous thread, it allowed me to buy a house at 18 by myself.

As Dave Ramsey would say, our kids work on commission. They don't earn an allowence, but we pay them for chores. I feel like giving them an allowence creates the sense of entitlement that I am adament about steering my kids away from. I will ask the kids do simple chores, and they can make a choice. They can choose do the chore (without complaining or whining, because I don't pay complainers) and get paid. Or they can choose not to do the chore, which I will do, but they in turn must pay me from their piggy banks to do it.

Both of our girls have 3 piggy banks. Spend, Save, and Charity. Of every 10 quarters they earn, 1 must go into savings, 1 must go into charity, and the other 8 they can spend as they please. I pay for mostly everything, so their money goes towards toys. Last year when we went to Disney World, I had them save their spend money for that. When the time came, we bought them each a $50 gift card from us and with the money from their piggy banks we bought traded it in for Disney dollars. At Disney World when we'd go into the shops, they would always ask how much things were and try to figure out if they had enough and I really think it taught them budgeting and to think about how much they wanted a particular item.

Money also works as a discipline tool in my household. If one of the girls hits the other, she must pay her sister a quarter. My biggest problem is at this point is our 6 year old is heavily motivated by money so this works extremely well, but the 3 year old isn't as motivated so she's broke pretty often. I'm hoping this will change as she gets older.

When they are older, I plan on doing a match plan with them when it comes to bigger ticket items like cars. As for school shopping, when they are old enough to care, I will have a set amount of which I am willing to pay for clothes, and they can choose if they want a couple pricey items, or a larger wardrobe of things they found on sale. I also intend to get them started with checking accounts as teenagers so I can teach them how to properly balance a checkbook.