This post is in response to Lenore (America’s Worst Mom) Skenazy’s request: Giving Kids Control of Money (So They Don’t Always Need Yours)
Money seems like it is a very difficult concept for parents to discuss with their children. I’m guessing it is because it is usually a difficult topic in general for the household (i.e. WE DON’T HAVE ENOUGH OF IT!). I’m providing my two cents on what I’m planning on teaching my girls about money.
Learn to Earn
I think the most important lesson for a child to learn is to earn the things they want. Delayed gratification will set them up to be better investors in the future. My family is well off and I can buy my kids any toys that they want. My daughters are currently 3 and 4. They see the neighborhood kids with their scooters flying up and down the sidewalk. They tried them out (with their helmets on of course!) and really enjoyed them. I bought two scooters at the store for them. All they have to do to earn them is get ready in the morning: Make their bed; get dressed, brush their teeth and brush their hair. If they do all that without me or my wife telling them to they get a stamp. Seven stamps = 1 Scooter. They haven’t earned those scooters yet with only two stamps each, but they want them, and they beg and plead. Dad says to them, “Of course you can have your scooter as soon as you get seven stamps. How do we earn stamps?” The kids groan “Make our bed, get dressed, brush our teeth and hair.” Dad says, “Great! Then do that and you can get a scooter!” This technique worked for earning a bicycle bell by finishing reading lessons.
Buy for Value
I really don’t have a problem with my kids wasting money on items that will soon lose their interest. It is my job as a parent to point out that the toy will become boring once they get it home and offer them alternate suggestions. Give your kids a choice. Dad says, “Are you sure you don’t want to save your money for that new bike you wanted?” Its a good lesson to teach to children to buy things that have lasting value. It’s hard from them to see a toy go for sale for $.25 at the yard sale when they used their hard earned money to buy it. The same goes for adults who put a $25 sticker on a $800 treadmill they only used once.
Lay-A-Way
As kids get older the toys will become more expensive. I’m sure I will hear the whine at the store, “~DAD~, I REALLY WANT THIS GAME! They are sold out everywhere!” Fine, I say. I’ll break out the wallet and buy the game (because honestly, it is a pain in the ass to find high demand products. Nintendo Wii near it’s release date, anyone?). However, it will go on lay-a-way. For those who didn’t grow up with parents that were out of work frequently and couldn’t get credit (as easy as it is to right now) a store would hold an item for you. You would make weekly payments until the purchase price was fulfilled. Then you got to take home your item. The same works for the game. Your child can earn the game (back to the earning concept) by doing extra work around the house or paying you back when they get cash from grandma and grandpa. As long as they keep making weekly payments, you’ll keep holding the item. If not, there is always E-bay or craigslist.
Get a job!
As your kids get a little older (10yrs and up) it is time to learn the value of money. I don’t really like the concept of an allowance. I especially don’t like tying an allowance to jobs that have to be done around the house. Everyone lives in the house, everyone has to help out with the weekly chores according to their ability (dishes, sweeping, vacuuming, toilets, laundry, etc). If my child needs something (food, clothes, shoes, etc) I buy it for them. If they want something above and beyond their daily needs they can again earn it. They say “~DAD~, I REALLY NEED THESE JEANS! Everyone is wearing pre-ripped, pre-strained, overlarge ones and I don’t have any!” Dad says, “I’m not buying those, they’re stupid looking. But if you want to do extra work around the house…” Give them the choice, do they not want the jeans or do they want to work for them? I’m all about getting extra work done around the house. It would make my life easier if they took out the garbage. But let us be honest about how much money is deserved for each task. If they want to take out the garbage for me, great! That is unskilled labor worth minimum wage. I take the minimum wage rate and calculate their earnings for the 10 minute task. According to the current federal minimum wage of $6.55 they earned $1.09 (and that is tax free!). That is learning the value of a dollar. Now, if they decide to do more unpleasant work like scrubbing out the trash cans, I’m willing to negotiate (because I don’t want to do it myself!). Just keep the rates honest with the work they are doing. If they make an honest effort at trying to earn the money, I see no problem helping them out by paying $20 of their $60 stupid looking jeans.
One issue confronting our youngsters is that they can’t get a job even if they want a job. Child labor laws have really hurt companies ability to hire anyone under 18 years of age. That’s fine, because it is time to sell your child out. Sell your offspring’s skills to friends, neighbors, and relatives. I know a lot of people who could use help shoveling snow, mowing grass, walking dogs (and picking up said dog’s dookie), ironing, being a second pair of hands, washing windows, washing floors, painting, pulling weeds, raking leaves, watching children, lifting heavy objects, emptying gutters, washing cars, cooking, cleaning and all those other skills you have taught them. Also, make your kids work cheap. The neighbor kid offered to cut my grass for $50. It only takes me 45 minutes, get off my grass you little cretin. However, cheap labor will get you more jobs in the future. If he had said $10 he’d probably be cutting my grass twice a week.
I had some more to say on teaching your child budgeting. But we’ll save that for another article.