Thursday, April 2, 2009

Money, money, money

We talked about sharing toys, and now another practical parenting issue . . . teaching kids about money.

A few years back we got these great banks called the Giving Bank from Christian Book Distributors or Crown. Crown now sells a more contemporary version called the Learning ATM. The Giving Bank provided us with a framework and visible separation for any money the kids receive. As we divide into the categories, we talk about putting at least ten percent in the church, fifty percent in the bank, and the rest into the store for spending money.

My husband and I generally fall more into line with the saver mentality than the spender, and watching my kids, most will probably still have their college stocks in their thirties, too. Kids tend to learn best with an example to follow.

We talk a lot about money. Where it comes from, where it goes, budgets, credit, banks, investments, etc. I don't ever want it to be mysterious. The older they get, the more they know and understand. We use credit cards and pay them off each month, but we still want our kids to "see" the money. We have thoroughly brainwashed them about never carrying a balance. Some people prefer to skip the whole credit card route anyway, not a bad plan in most cases.

The kids earn interest on their savings. Sometimes this motivates them to put more into savings than they would otherwise.

We don't loan money to our kids. Now, the oldest is only eleven, but we don't make a practice of buying something that they need to pay us back for. If they want something that we would not usually buy for them, they need to have the money for it. We also recognize our role of still having some control over what they spend their money on. Just because they have money in the "store" category doesn't mean they can spend it all on candy or dollar store toys. Wisdom in saving, and wisdom in spending.

I set up a homemade checking account for our oldest. I had a bunch of carbon paper sets and wrote out a check layout on them (number, date, for______, money blanks, signature, etc.) He keeps his savings in the real bank, so when he wants to spend it, he writes me a "check" and deducts it from his account balance. This has given him great exposure to money management and banking that I wasn't quite ready for him to learn in the real world yet.

Encourage them to earn money. So far, they haven't acted on this encouragement much, but we have talked about it a bit. If they do want something that we don't have budgeted, or want to participate in an activity that we don't have extra money for, we encourage them to go for it. They can save and earn even at their young ages.

With the economic crisis that our country currently faces, we have ample opportunity to show our kids why they need to make stewardship a priority. God has entrusted us with much in the lives of our children, and money is just one of many areas that they need to learn to steward well.

Stewarding our time is another area we should model, and that I will jump into next time.

Other resources:

Financial Parenting
Bible study for kids about money
An online article about kids and money
Dave Ramsey's kids' tools
Whatever Happened to Penny Candy

. . . and more Frugal Friday!


Anonymous said...

Love the bank idea! We've been looking at practical ways to teach our boys and this just might be the solution! Thanks

J Peters

Megan said...

This is a great concept.