Tips on teaching kids about money:Frugality part deux

Miscellaneous and Personal Stuff I Must Share
1

Inspired by my own thread of the Frugal Corner, I thought we could start up another thread for those with older kids and what they have done/are trying to:

1)Teach them to save money
2)The value of a dollar

The only idea I have is from a family magazine that one parent made a deal if their 10 year old child wanted to buy something that was educational, the parents paid for half of it. If it was a fad or toy, the child had to pay for the entire amount out of their allowance.

Make it your mantra ‘I want that barcolounger ,but absolutely will not bid above $30 for it’. - Yankee Blue

2

My children will be 13 & 9 soon, Most of this applies mainly to my older son, although my younger is always within earshot. I do not give an allowance per se, I assign several jobs a dollar amt. walking the dog is $10 a month, vacuuming is $3. etc. etc. And report cards are rewarded by grade, an A is $10… so on. My children see me go to work everyday. they have seen our budget and understand how it works. I explain to them how I have received promotions at work, and how the money I earn is valuble to me not only to purchase things and pay bills but it is my hard work, time and effort. I simply take real life situations and put it in their perspective. I do not burden them with this, they are children, it is a precious time not to have to worry about payment deadlines. But I do share with them. Hopefully preparing them for their lives as adults. And I agree with the comment on educational items, I will never say no to my children if they want a book, or a telescope, or anything i believe would expand their education and creativity. (Zany Brainy, I should buy stock in Zany Brainy)

so you found a girl who thinks really deep thoughts. what’s so amazing about really deep thoughts? Tori Amos

3

Not having kids yet, I can tell what I wish I had been taught.

  1. I wish my mom would’ve shown me what a budget is (not that she had one :wink: )and how it works.
  2. I wish someone would’ve adequately explained the pitfalls and benefits of credit (but mostly the pitfalls!).
  3. I wish I would’ve been taught how much things really cost like groceries, electric bills, etc.
4

Well the kid decided it would be cool to have an allowance so we made attached it to him doing his schoolwork. If he did that, he would get paid. Little bugger lied about doing it, though, so in comes a signature from the teacher each week saying he did all the work.

Attach allowance to something, so they know that’s how people get money as adults, they work for it.

5

Make the child a part of the budgeting/purchasing process. Allow the child to contribute and do not laugh at any of his ideas or suggestions.

6

My problem with attaching an allowance to doing chores is that it can also foster a feeling that you should/will always be paid for doing what you have to. Responsiblities are responsibilities, and don’t always come with reward, save the feeling of a job done right. When I grew up, I got an allowance of a little amount each week, no string attached, I was a member of the family and this was my ‘share’. It was enough to maybe go to the movies once a month. If I wanted more, I had to work for it, and what I did was over and above my chores. I’d dig holes for my mothers garden, I’d cook dinner, these were things in addition to the chores of cleaning the bathrooms and my bedroom, and mowing the lawn.

It goes without saying that I think that is the better way to handle it. Chores are Chores, and do not call for reward. Work done above chores does. And the kid is a member of the family, and should perhaps have a little discretionary money, but only enough that he has to save to buy with it.

>>Being Chaotic Evil means never having to say your sorry…unless the other guy is bigger than you.<<

—The dragon observes

7

I don’t have kids, though I want to some day. I hope if I do have a family, I’ll be able to take both the good and bad things I learned about money and use them to teach my kids wisely.

My parents never talked about money with us. Either we had enough money for something, or we were “on a budget”. So, I grew up thinking that a budget was a bad thing, it meant that you were broke. I’m still trying to unlearn it.

I got an allowance, and money for good grades, but I wasn’t taught to save any of it. Once I could drive and my social life was more than the occasional sleepover, my parents doled out money per occasion. Again, there was either money for it, or we were on a budget, and I never knew the mechanics going on behind the scenes. I never learned to plan from one allowance to another.

My parents are still a soft touch, and - as much as I’m grateful for the times they’ve helped me out, as much as I am determined to pay them back one way or another - part of me wishes that at some point, they’d tell me point blank: “no, we will not bail you out.” I would learn to handle my money a lot more responsibly under those circumstances.

Will work for sig line.

8

First, I agree with Narile that chores should not be paid for; The family home needs to be maintained by the family.

One thing that was mentioned on the Frugality Thread was that you should not take your kids to the grocery store. I have to disagree. My mother always took us, and she would talk about what she was doing: figuring up unit price, using coupons, selecting generic brands, etc, and we learned a lot.

THere is one problem I see alot now that I am in college are kids who expect to continue to live in the same style that they did under there parent’s roof. They do not seem to understand that their parents lived very differently in there own 20something years; they have no clue how to be poor, and what the difference is between a luxury and a neccesity. I do not know how to prepare kids for this, except perhaps to sit them down and explain frankly that the luxuries they have become accostomed to–in house laundry machines, working air conditioner, dishwasher, money to go out etc.

9

Well, I agree chores are chores, my children do not get paid for cleaning their room, helping put groceries, dishes, laundry away, putting out trash etc. But they do get paid for other jobs they help with. Granted, these are jobs that simply need to be done to maintain a home, but it is my home to maintain, they are children. They are aware that I do not get paid for the work I do around the house, I get paid for going to work. But they are children, the only work they can do short of a paper route is housework and schoolwork. The only way to demonstrate how earning a living works is by rewarding a job well done. A simple explanation should make it clear that one day these will simply be daily responsibilities. Just having a ‘share’ of the family income does not sound like a good way to demonstrate this. It sounds more like money for nothing.

so you found a girl who thinks really deep thoughts. what’s so amazing about really deep thoughts? Tori Amos

10

This is kinda off-subject, but the most adorable, Norman Rockwell-esque moment of my life came when I went to my local credit union one day.

There were two kids, about 5 and 7 or so, their piggy banks open on the floor, very scared, sad, sober looks on their faces, and their mom explaining to them, “It will still be your money, they just hold onto it for you.”

I smiled till my face hurt.

“You had me at ‘Hell no.’”

11

I don’t have kids yet either, but here’s how my parents handled it in our house. Once we hit a certain age (and for the life of me, I can’t remember what that age was), we got an allowance. But we always had to do chores like “kitchen duty” (setting and clearing the table, no cooking), raking the shag carpet (I kid you not - and now I’m really dating myself :)) and keeping our rooms picked up, before and after we got an allowance - one had nothing to do with the other. We never had to do any of the actual “cleaning,” like dusting, mopping, laundry, etc. though. And yes, we were told that the chores we had to do were because we were part of a family, all of whom had certain responsibilities.

The only things we got paid to do around the house were things that my parents would have paid someone else to do, had we not done them. If they’d have hired a neighborhood kid to mow the lawn, instead they “hired” us to do the job. I got paid for babysitting my sisters only when I had to turn down a babysitting job for someone else because my parents needed me.

In the 4th grade, a friend of my mother’s was the head of HR at a major department store and convinced her to let me model in the tea room on Saturdays. I got paid $20.00/hour and every penny of it was put into an interest bearing savings account in my name. I started babysitting for other families when I was 11, and that money went into my savings account as well. So I understood the meaning of an hourly wage and putting money away for the future at an early age.

And I didn’t touch a dime of my savings until I was 17 and wanted to take a Summer trip to Israel. I also took out a loan for half the cost of the trip, so I got to learn fairly early on what it was like to borrow money and have to make payments, as well as saving up for something “big” I wanted to do.

I worked part time at the mall all through high school too. My parents sat at the kitchen table every month to pay the bills, so I saw how the process was done. And since I was earning my own money, my dad made me fill out my own tax returns every year, too.

I never had to pay for my clothes, shoes, toiletries, etc. My money was for gas (even though it was my parents’ car), lunch at school, and entertainment only.

I turned out to be extremely responsible with money as a result, and nothing I had to face when I moved out on my own came as any big surprise.

“How wonderful it is that nobody need wait a single moment before starting to improve the world.” - Anne Frank

12

My sister (the one who frequents consignment sales), allows her daughter to chose what old toys and books she doesn’t play with any longer and wishes to consign. The daughter gets to keep the money for those items, while my sister keeps the money (or rather, re-spends it) for any consigned clothes. My niece is allowed to spend as she chooses, but she knows how much she has, what something costs, and knows when the money is gone, it’s gone. She doesn’t get paid for grades, my sister likes to encourage her to do well for the sake of doing well.

StG

13

This month’s Kiplinger’s magazine has an article about what you should teach your kids, by their age. Since mine are rather young, I only read the first part of the article (like I’m going to remember it in 5 years anyway). The funny, but true, part about little kids is that they will automatically think a nickel is better than a dime because it’s bigger. I’ve seen this in action. I guess it’s best to teach the basics first!

14

David B: The funny, but true, part about little kids is that they will automatically think a nickel is better than a dime because it’s bigger. I’ve seen this in action. I guess it’s best to teach the basics first!

What I learned is to pay allowances in nickels. :slight_smile:

“Do you want 100 tiny dimes, or 100 shiny nickels? Or how 'bout 100 pennies? They’re special because they’re a different color.” :slight_smile: :slight_smile:

The Canadians. They walk among us. William Shatner. Michael J. Fox. Monty Hall. Mike Meyers. Alex Trebek. All of them Canadians. All of them here.

15

MandaJo wrote:

I wrote that and in my defense I wrote it for parents with toddlers (say 4 and under crowd, where temper tantrums are more likely to happen.) We’ve all seen the crying whining, screaming toddler in the store and the parent who buys the something to shut them up
(candy, a toy, whatever) and I think IMHO, that is teaching kids that all good behavior is rewarded regardless.

Yes, there are times that they should be rewarded and each child/family knows what buttons are factors in their own little world ( say, behaving at Great Aunt Stella’s house when there is nothing to do, no tv and she has twenty hissing cats. Then maybe a treat is in order.) But behaving in the store is a product of several things: Parents not pushing their young children’s attention span by shopping during nap time or constantly dragging them to store after store without any chance for the child to run around and have fun. Knowing their boredom threshold limitations is also key. It’s not fair to the child and it’s not fair to the parent, who more than likely, will go off budget and race to finish the shopping, even with a screaming child in tow than take them out of the store to settle them down.

Older kids can be incorporated in the joys of shopping. Perhaps give them a list of the items they could get and show them the difference in price between store brand and name brand. If there are a couple of kids involved, give them each a list and write down the savings between the chose brand and whom ever has the most saving at the end of the shopping trip, say, receives half that amount for a “rainy day” activity. ( I just thought that up, I’m a genius…oh …the moment has passed)

When I started high school, my mom went back to work for the first time in umpteen years and it was my job to do the grocery shopping. My brother sat in the car and waited for me. I made a deal with my mom, whatever money I saved via coupons, generics I could keep if I brought us under budget. It took some learning to do, but I brought us in under budget every week by trial and error.

Narile I agree with you on Chores are Chores. No one pays Mom/Dad for their efforts in keeping the house up, the children, IMHO, have to earn their keep. Perhaps I am the product of another generation, but pitching in around the house was expected of me as a kid and I was never given any money ( except mowing the lawn by my older brother who hated doing it and that didn’t last long after Mom found out, darn it.) Instilling a sense of responsibility and pride in your family and where you live is what I believe is crucial.

16

This is along the lines of “Getting your kids to pick up and learn about money.” I’ve saved it from Ann Landers from a while back and I’ve always thought it was a good idea. Here’s the entire article:

Dear Ann Landers,

You’ve printed a few letters from parents who have a hard time getting their kids to pick up after themselves. I am a 64 year old grandmother, and I raised 8 very tidy children.
Here’s how:
I told them I was not their maid, but if they insisted, I would pick up after them. There would, however, be a charge because maids get paid. Everything I had to pick up went into
“Mom’s Sack”. On allowance day, the items were bailed out at 50 cents per piece. ( This was 20 years ago, so everything was cheaper.) If the child didn’t have enough allowance to cover all his items, I got to select what was bailed out (clothes before toys).

Within two weeks, the " maid" was almost totally without a salary.

  • A Texas Grandma

Dear Texas Grandma,
The best advice is from someone who has “been there, done that” and you certainly have. Thanks for a letter that can serve as a splendid blueprint for parents everywhere.

Make it your mantra ‘I want that barcolounger ,but absolutely will not bid above $30 for it’. - Yankee Blue

17

When I was a lad in Akron, the depression was still going on (still is) and I never got an “allowance” just for my good looks. Every nickel and dime was attached to a chore and that’s why I got a job when I was 13 because the pay was better and I’ve been employed every day since then. I pay my kids the same way, a buck or two here and there for a job well done teaches them the ways of the real world. Of course my oldest just got a job at a car wash because the pay is better than the old man. He understands that he will pay his own car insurance and that’s a real incentive for him to save. How they choose to spend it is their own decision but I try to get them to think long term and not blow it all on junk. They are starting to sell and buy on Ebay and I think that’s great, too.

“Hope is not a method”

18

My personal experience:

I never got an allowance as a kid. We worked around the house because we were expected to.

When I reached 15, the money I earned on summer jobs was what I used for my spending money the rest of the year.

19

My parents were both raised during the Depression. They taught their children the value of the dollar by teaching us the value of a nickel 20 times. ;D

“The dawn of a new era is felt and not measured.” Walter Lord