Family

Kids And Money

I have a beautiful, bright, seven year old daughter. I give her money for completing chores around the house. She also receives money from relatives (on her birthday or a Christmas). And when she loses a tooth, she gets a dollar from the “tooth fairy”. I like to talk to her about her money, and I’ve taught her that there are three basic things that she can do with her money. She can spend some of it, she can save some of it, and she can share some of it.

I created a really basic money management system for my daughter. She has three jars in her room, one for spending, one for saving, and one for sharing. She puts 50% of her money into the spending jar, 40% of her money into the saving jar, and 10% of her money into the sharing jar. On Sunday morning, she takes money from her sharing jar and places that money in the offering plate at church. During the week, she is free to spend her spending money on anything that she wants to buy (so long as it’s safe). I’ve just recently opened a savings account for her at our local bank, and once a month she goes with me to deposit her savings. At Christmas time, she can use her savings to buy Christmas presents for her mommy and her brother.

There are some things that I believe parents should purchase for their children: Food, clothing, school supplies, etc. Out daughter’s spending money is used for those items that she wants. Mainly, she uses her money to buy lip gloss, baby dolls, small toys, books, and other fun stuff.

In a few years I’ll talk to my daughter about saving money for bigger items, like a new bike or even an automobile. Right now, the furthest that she can see into the future is about 3 months. So, we keep our savings goals very, very simple. She loves Christmas, so she’s saving for Christmas.

As for her responsibilities around the house, there are certain “chores” that she does simply because she is a member of our family. For other “chores” she receives compensation. At the end of each week, she usually receives between $5 and $15, depending on the number of extra “chores” she has done. While I do not believe in a traditional “allowance”, I do give her spending money from time to time, just because she’s my little girl, and not my employee. My wife is an extraordinary mother and she spends hours and hours each week with our daughter and our son. Most of the chores that our kids do, they do together, and there are times when I give my daughter “bonus” money for being especially kind or helpful. I also allow her to “help” her little brother manage “his” money. I will let my daughter hold the money until we go to the store, and then she will help her little brother pick out what he wants.

From time to time, my children will receive checks from their grandmother. These checks may be for as much as $200. My daughter is not old enough to be responsible with $200, so I deposit this money into her Educational Savings Account, or I cash the check and buy my daughter an actual present. Their grandmother is ninety-five years old and she likes to give cash instead of going shopping.

I want my daughter to have a good relationship with money. I want her to understand the value of a dollar, but I never want her to feel like she is a financial burden to the family. I’m always careful when I talk to her about how much things cost, and I always assure her that I am happy to buy her things. My wife has done an awesome job of teaching our children about the value of saving and sharing. I’ll never forget hearing James Dobson say, “You are not rearing children, you are rearing future adults. You must prepare your child for life as an adult.” Teaching my child about money is very, very important.

Do you have any ideas about kids and money? Share them with a comment.

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14 thoughts on “Kids And Money

  1. It sounds like you are doing a great job.

    In my eyes, money savvy comes from the parents. You don’t learn it in school, or from your “friends”. Early formation of money skills should help to insure a less stressful financial future.

    Knowledge is power.

    I especially, love your “sharing” jar. Many kids focus on themselves, which is normal when you are young. I think it is helpful for all to learn, that we are not the center of the universe. We need to count our blessing and thank our God and help each other. This is true success, in which lies the secret of internal and eternal happiness.

  2. Thanks for including this post in the Carnival of Family Life. The Carnival will be posted later today, so drop by. There are LOTS of other submissions! Fun reading!

  3. You sound like a model parent. This article is exactly what I would like to do with our kids. Unfortunately, we don’t have any kids yet, so I hope to remember these tips when the time comes in a few years. I’ll be forwarding it to my sister though. Thanks!

  4. NCN,

    You are right on with your approach.

    You certainly don’t need me to tell you to disregard comment #1. Good advice is good advice. Dr. Dobson made an observation that seems obvious, but as we know it is not. Too often parents are tying to manage their children’s behavior with harmony in mind, not skills for life. They just want the kids to “be happy” and that’s not always consistent with developing character.

    As always, best wishes and keep up the excellent role-modeling.

    M. Sneed

  5. We are trying really hard with the chore system… my daughter only gets money if she does her chores, and can buy what she wants. I think your 3 part system is a great idea! Here from the Carnival of Family Life.

  6. If you want unbreakable jars, Dole has plastic mason jars. I was thinking of them today when I saw this post.

    The three part system reminds me of that fancy moonjar thing I posted a few months ago. But why buy when you can make? Right?

  7. I think the little system you have set up is great. I find that kids who learn early about money management have a much easier time as they grow up in that department as well.

    Here via the carnival of family life.

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