As a parent one of our many “jobs” is to teach our kids about money. A quick google search provides pages and pages of ideas and ways to teach your kids the most important things about money – managing it, saving, spending etc
A few months ago I sat down with my boys and we talked money – cold hard cash, and the electronic bank account balance type. We discussed things like how important saving money was – both for long term and short term goals. We covered things like being able to make their own spending decisions was important to them, but that it was also important to me that they didn’t simply waste their money. We talked about saving via their money banks vs a savings bank account. It was interesting from my point of view to realise that they had already a lot of their own views and ideas about money, about where it came from, what it was needed for and how it would change their future.
The next topic up for discussion was pocket money, my Mum has her own “formula” for pocket money that worked well for her. I wasn’t sure how to tackle it myself, so the kids and I talked and we were all in agreement that having a portion of their pocket money put away into their bank accounts was a great idea. This meant that they had full say (on the condition it wasn’t simply wasted on junk food or junk toys) on the money that went into their money box/wallet each month.
We talked for a while about what a fair way to do pocket money for the 3 kids was (lil miss just agreed to anything as long as it meant she got to put something in her money box). We eventually arrived at a solution that everyone was happy with – the kids would all receive an equal amount paid into their bank accounts on the first of the month (this also ensured that they were then eligible for the extra interest on their bank account, but that is a whole other subject!) and then one dollar per year of age which is paid to them again on the first of the month. It seemed like a long time between “pay days” for the first few times but once we were settled into it the kids would be counting down the days, flicking through the junk mail dreaming of ways to spend their money!!!
Since implementing this pocket money system we have had further talks about saving for things such as lego which takes more than a month (in some cases it takes 4 or 5!), and the boys have also learnt the benefits of pooling their resources in order to achieve a goal faster (after all there really is no point both owning the exact same box of lego when it all gets mixed together!) but they have also learnt the disappointment of spending all their money and realising that they are now back to step one in terms of saving for what they wanted. The boys have done really well with understanding the different concepts, and that in order to get what they want they have to save and be patient, if they “slip up” and spend some money it’s not the end of the world it just means that they have to re-look at their goals and maybe extend them out a bit. And their bank accounts are starting to look very healthy! And i’m pleased to say they no longer think you just pull out a plastic card and can buy anything, anywhere, any time – parenting win!!!
So what’s next on the money list? In the adult world we call it overtime, in kid speak it’s known as “extra chores for extra cash”, I’m picking there will be some tough negotiations going on in terms of the value for each chore!!!