Kids & Parenting
PLEASE ENCOURAGE AUTHOR BY COMMENTING
LEAVE COMMENT ON ARTICLE As A Member OR Visitor
Message Writer
Hire Writer
Report Article
LEAVE COMMENT ON ARTICLE As A Member OR Visitor
Message Writer
Hire Writer
Report Article
Managing money is arguably the most practical skill that parents can impart to their children. Only through experience and much patience and diligence on your part will they learn the skills that will eventually lead them to financial responsibility and independence. The importance of teaching your children the value of a dollar early in life cannot be overstated. It is a process that will not always be easy or convenient but holds great benefits for both you, as parents, as well as for those future young adults that have been entrusted to your care. Implementing the following strategies will not only result in teaching your children how to effectively manage money but will bring about a positive and fundamental change in their behavior.
1) Be committed
Being committed to a solid plan is the root of success. Consistency in carrying out your plan is equally important but not everything will necessarily work for you just as you had hoped it would. Along the way, adjustments will need to be made, therefore you must remain flexible. Making a change or trying something new isn't a problem as long as your kids know you remain committed. Most parents will admit the wisdom of teaching money management and may even be ambitious enough to start on a plan but all too often when the path gets difficult or a little too inconvenient will default back on the way they have always done things. I would encourage you to be in this for the long haul - you will need every one of those 18 years to train your kids so that they leave the nest with an upper hand on their finances, ready to make good choices and able to recognize and avoid the pitfalls that are so common in our society today.
2) Use cash
To a young child, the concept of money can be very confusing. In order for them to begin to comprehend the value of money we first introduce coins to them. We try to get them to understand how many coins in a dollar and so on. Their knowledge is limited to the tangible coins and notes that they can see, touch and feel. The problem is that in our society today many people no longer regularly carry and use cash in their everyday transactions. It takes time for a child to gain an understanding of how things are paid for without the presence of real money. Just as in other areas of life, we want to model for our kids how to handle money and it's hard to model something they don't understand and have no experience in. So, use cash. Go ahead and electronically pay your regular monthly bills but then get to the bank, make a withdrawal and use actual cash for your discretionary spending. Split it into envelopes within spending categories such as "Home", "Dining and Entertainment", "groceries", "Personal Care", "Clothes", "Miscellaneous", etc. Then use the cash from the envelopes for your everyday purchases until you re-fill the envelopes with your next paycheck. The envelopes are just a guideline, the point is to use your cash on hand for spending and when the cash runs out, you stop spending. This is also known as living within your means and is simply modeling what we are going to ask our children to do.
3) Give an allowance
One cannot be expected to learn a skill if they never get an opportunity to practice. There can be no learning if your children do not have their own source of real money to use to begin to make their own choices with. You can start giving them a small allowance at about the age of three. Only you can decide the amount of weekly allowance that is appropriate for you child but remember, the objective is to teach them the value of a dollar and a child that is too spoiled will never learn this lesson.
An allowance gives your child the element of consistency and, therefore, should not be conditional - i.e., dependent on the completion of household chores or on their behavior. That doesn't mean they don't have responsibilities in the house or that they can get away with poor behavior, but the allowance is your leverage, so to remove it is to remove the most effective tool that you have in your arsenal to teach them. There are more effective ways of dealing with irresponsibility.
Your child's allowance will need to grow along with their age and maturity. Have a plan to give them regular cost of living raises. For example, if you start your child off with a $3.00 per week allowance, perhaps plan to give a fifty-cent increase on each successive birthday. Make it a big deal - have an interview where they have an opportunity to tell you if they think they deserve a raise and why. Has he been respectful and obedient? Has he completed his chores when required without whining? Has he done adequately in his school work? If there has been a real problem, you can hold off on the raise temporarily with the promise to revisit the subject in a couple weeks. Most likely his tune will change, if you don't spoil him in the interim, as kids are much more money motivated once they realize they are responsible to make their own purchases.
4) Instill good habits early
The only requirement that should come along with an allowance is that the child must save a portion and give away a portion of their income. Generosity is an important virtue to teach and the very act of giving breeds a generous heart and I believe blessings fall on the generous. So, whether you give it to your church or some other worthy cause or organization, consider having your child set aside a small portion of their income to give each week. To keep the math easy, have them save 10% and give 10%. Have them drop the savings money into their piggy bank which, in our house, is their contribution to their college fund. Never have our children objected to saving for this purpose. Just as we save for retirement, they are saving for their future. Saving for college invests the kids personally in their future and serves to clarify the expectations of some type of higher education. Together with our children, about once a year, we break open the bank and count the money. As parents, who use cash, we also contribute throughout the year and low and behold it always, to the amazement of our kids, adds up to be a fairly significant dollar amount. After depositing the money, we further invest it so that it will grow into something that will actually help with the future cost of education. If they want to save for something specific, perhaps an expensive electronic device or an automobile then keep a separate savings envelope with their money in it, earmarked for that purpose. Eventually, when they have enough cash saved, help them open a savings account at your bank.
5) Charge for maid service
Household chores are necessary for kids to grow in responsibility and a child needs to help around the house just because they are a part of the family. So then, how do you motivate your child to complete their chores without holding back the allowance? The answer is, charge for "maid service." Assign a value to his responsibilities or chores and be willing to complete the task for him with a smile, or better yet have him pay a sibling do the chore for him. It won't be long before you begin to see compliance. It is amazing how well this works to limit the conflict over chores in the house. Every time you pick up a stray sock or pair of underwear, that's ten cents (more as the allowance increases) out of next week's allowance. The money that is collected gets put in the piggy bank along with a pleasant "thank you for contributing you your college fund." Make sure to have the child take the money out of their wallet and hand it to you so that it solidifies in their mind that there is a cost of not following through on their chores or responsibilities. Always have enough change on hand to break a dollar bill. Losing a hard to come by dollar bill, especially when they are young, may for the moment make an unhappy child but is impactful and motivating.
6) Create opportunities for earning
Find ways, in addition to the allowance, to fill your little one's wallet. The following are a few things that have worked in our family but this is your opportunity to get creative. Perhaps you can offer to pay your child for a job around the house - something not on his regular regimen of chores and responsibilities or we have found success in offering compensation for grades. Money does motivate once the child knows that you no longer give in to his every request and why not use that for his benefit in the area of grades. After all, as adults, we are rewarded monetarily for success in our careers and what parent doesn't let their child know that school is their job. After some trial and error, we have settled on paying each child one week's allowance for each "A" they receive on their report card, including conduct grades. Plus, as an added incentive, we offer a ten-dollar bonus for the making the "All 'A' Honor Roll." Using this pay scale keeps things orderly and fair if there is more than one child.
Another way we have found effective is to reward our kids for any sincere behavioral complements they receive. An extra dollar here and there not only helps to fill their wallet but at the same time it provides motivation for them to think about how they act when we are not around. Of course, we assured them if they ever told anyone or otherwise attempted to manipulate the system the benefit would come to an end.
In an effort to help the kids save for something special, during the summer months, we use a game that rewards good behavior. First, we give them each a treasure chest full of "treasure" (100 marbles worth a quarter each). Then, each night at bedtime, we would either take some of the treasure away or add to it based on their attitudes and actions during the day. This worked well to help them fill their wallets with the duel benefit of generally better behavior. You get the idea - find fun or challenging ways to help your children acquire their own money. The side benefits, like improved behavior or good grades will often be their own reward.
7) Stop buying things for them
Put a limit on the extras. The older the child and the more resources they have the more this applies. You will have to decide where to draw the line but none of this will work if you continue to indulge your child with anything and everything they desire whenever they want it.
Take them shopping with you and let them walk down the toy isle or the sports isle. Encourage them make a list of the things they would like for their birthday or Christmas. If they want an item sooner than later let them save their own money for it. It is gratifying for them when they finally save enough to be able to pay out of their own pocket and they learn the valuable lesson that there is no money tree in the backyard. The result is less stress for you, because once Junior realizes that it is not mommy who is preventing him from getting what he wants, but rather a lack of funds on his part, there is no longer a benefit for the child to argue or pitch that fit that he might have if he were not expected to make his own discretionary purchases. In the beginning you can count on some resistance, but never give your children what they want to stop them from whining or you will never bring an end to the whining. Stay committed - it works!
Along the way there will be many occasions when you will see that your child is about to make an unwise buying choice and it is helpful to present them with all angles as they may not realize the consequences of spending all their money on this useless toy (as you see it), when what they really want is this more expensive toy over here. But alas, should they decide to spend on the thing they are eyeing now to get that immediate gratification, let them, that is in fact how they learn. At some point you will see discernment come in to play and you will be impressed at the wise choices your little one is beginning to make.
8) Share what things cost
At appropriate times, as your children mature, it is a good idea to let them in on your cost of living. They will be in awe when they see you hand over a couple hundred dollars in cash to pay for the groceries for the week. Share with them what your monthly utility bills are. As the ability to comprehend the value of a dollar increases so will the understanding of why it is you get impatient every time he leaves the door open when the air-conditioner is on, or when he opens the refrigerator just to gaze inside for seemingly no particular reason. If you child is like most kids all the exasperation and or yelling on your part might make him more aware that his negligence is costing you, but until you make it personal, behavioral change won't be the result. So, if there is a recurring habit that you want to rein in, get his attention by charging him an age appropriate fee for his bad habits. For instance, you may calmly let Junior know that since "water costs me $25 per month the next time you forget and leave the water running in the sink, you are going to have to contribute .25 cents to the water bill." Let him know how much gas cost so when he forgets his project and you have to make an extra trip to the school he won't complain when you charge him for the gas. It will hit home when he hands over the cash and then doesn't have the money to get that toy he wants the next time you are at the store.
Kids have a tendency to take things for granted - they will take what you give them. If they know they have no "skin in the game", so to speak, and you will provide everything with no strings attached then that fosters a sense of entitlement that will work itself out in irresponsible behavior. In order to prepare your children for the "real world" it is your job to let them know that in only a few short years they are going to be incurring these types of expenses themselves and with the cost of living today there is no substitute for hard work and no room for wasting one's resources.
9) Do not lend money
Part of our financial goals should be to live debt free, particularly in the area of consumer debt, and to have our kids learn to live within their means also. The hope is that by training our children when they are young, they will be ready to make good decisions when they leave the home. So, as they are growing up, we do not want to set the precedent that debt is acceptable. Very simply, when Junior has a desire and not enough money to pay for it, employ the principle of delayed gratification. That is, wait and save to make the purchase. They may not rejoice in your decision right then and there but before long they will learn to not even ask you anymore. Alternatively, if they lack just a bit to get that thing they have been saving for, you can offer to make up the difference by paying them for a job well done around the house. In the unusual case that you feel it absolutely necessary to lend, make sure they understand that they are to pay you back with their next allowance and that there will also be an interest fee for the loan. Your child needs to grasp the reality that debt will cost them. If you have credit card debt yourself that you are trying to pay off, share with them the interest cost and fee's that you incur and how much that will cost you over time.
10) Do not be hypocritical
Finally, make sure you are modeling the behavior you want to teach. If you don't have the money for something you want, think twice before just charging it on a credit card, especially if you know the card carries a balance. Many of us have made mistakes in the past, but don't use that as an excuse for not teaching your kids the right way to do things. If you wait until you have everything perfectly under control you may never get to it. Be honest with your kids about your mistakes and let them know that you desire better for them. It is okay to learn together as long as they see your heart is right and that you are moving in a positive direction yourself, willing to use the same sound money management principles that you are trying to teach them. Past mistakes are one thing, but hypocrisy will be sniffed out quickly and all your efforts will be in vain.
PLEASE ENCOURAGE AUTHOR BELOW LEAVE COMMENT ON ARTICLE AS A MEMBER OR VISITOR
Reader Count & Comments
Date
The opinions expressed by authors do not necessarily reflect the opinion of FaithWriters.com. This is especially true with articles that
deal with personal healthcare and prophecy. We encourage the reader to make their own decision in consultation with God, His Word, and others as needed.
This article has been read 1472 times < Previous | Next >
Read more articles by Stephen Kimball or search for other articles by topic below.
This article has been read 1472 times < Previous | Next >
Search for articles on: (e.g. creation; holiness etc.)
Read more by clicking on a link:Free Reprints
Main Site Articles
Most Read Articles
Highly Acclaimed Challenge Articles.
New Release Christian Books for Free for a Simple Review.
NEW - Surprise Me With an Article - Click here for a random URL
God is Not Against You - He Came on an All Out Rescue Mission to Save You
...in Christ God was reconciling the world to himself, not counting their trespasses against them... 2 Cor 5:19
Therefore, my friends, I want you to know that through Jesus the forgiveness of sins is proclaimed to you. Acts 13:38
LEARN & TRUST JESUS HERE
FaithWriters offers Christian reading material for Christian readers. We offer Christian articles, Christian fiction, Christian non-fiction, Christian Bible studies, Christian poems, Christian articles for sale, free use Christian articles, Christian living articles, New Covenant Christian Bible Studies, Christian magazine articles and new Christian articles. We write for Jesus about God, the Bible, salvation, prayer and the word of God.