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.