Teaching kids about money—Part 1

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Wow!!!  We’re going for the throat on this one.  Teaching kids about money is one of the hardest and most complex and most controversial and most personal of tasks facing parents and society at large.  But that’s never stopped us before.  Let’s take this topic on and see how many readers I can piss off.

As a kid I remember home economics class.  This was in the early 1990s and the shadow of “this is really a class for girls” still loomed, although that was definitely changing.  Reflecting on it now, that was probably the most important class I ever took in school and I blew it off.  Skills like how to prepare a healthy meal, balance a checkbook, plan a large purchase, do a load of laundry—those are important.  Want to know what knowledge I haven’t really used a lot as an adult: trigonometry (and I’m a huge math nerd), the generals of the Civil War, how to diagram a sentence, which colors complement a blue background for an art project.

The point is, the most important life skills aren’t taught very well in school these days.  That’s a topic with a lot of deep water and could consume hundreds of blog posts.  But in the here and now, we reynards and vixens (did you know that’s what adult male and female foxes are called?) need to teach the cubs about money and managing their finances.

I will be the first to admit that I’m not perfect at this.  I am constantly learning and tweaking what I do, but here are a couple ways I try to pass these lessons on to ‘Lil Fox and Mini Fox.  If you think my approaches are good ones, feel free to steal them; if you think they suck, feel free to give me some pointers.

Allowance

For cubs as old as ours are, the allowance is the central element of the cub economy.  I pay each cub one dollar per work day (weekends not included).  This is payment for all school related work which Foxy Lady and I purposely call their jobs (“You know how Dad and Mom have jobs that make money?  Well, school is your job.”).

Additionally, the allowance pays for chores that they need to do.  We’ve been working on expanding this list, but admittedly we aren’t great about that.  Some times it’s easier to do it ourselves than work with a 7- or 10-year-old to get it done.  That said, taking in the dumpsters after trash day, taking dishes to the sink, cleaning their rooms, and putting away their backpacks and shoes are their main chores.

Every Friday is payday and I give each cub $5 for the week of work.  I go to the bank every couple of months and withdraw $100, all in singles.  Each cub gets five one-dollar bills.  This was purposeful because I think getting a bunch of bills has a bigger impact than just getting a five-dollar-bill.  Maybe I’m right on this, or maybe I’m wrong.

Spending it

I feel I am probably over-paying for the allowance, but then I am pretty mean when it comes to what the cubs need to buy, so I figure that balances things out.

With their money they have to buy: Slurpees, any toys that are not birthday or Christmas gifts, gifts for their friends if they are invited to birthday parties, their season passes to Carowinds, and any video games.

It’s funny when we go out and I stop at a gas station to get a soda.  Mini Fox ALWAYS asks if he can get a Slurpee.  When I tell him he has to pay for it, he really thinks about it.  Sometimes he says “yes” and other times “no”.  That’s really the whole thing I want to accomplish.  If they can understand that if they want something it costs money, and that money comes from their hard work, then I think I’m winning. 

Also, we’ve had a lot of conversations at Wal-Mart about something they want to buy but they don’t have the money.  This leads to good conversations about them saving, and how long it would take (If it costs $22 and you have $8, how much more do you need?  If you get $5 each week, how long will it take?).  Also, the two of them can strategize about pooling their money, but then they have to share it and only pick something they both want.  That seems like parenting wins there.

Saving it

Obviously the other big concept is saving.  For us this is equal parts conceptual and physical.  Conceptually, we talk about those things above—if you want something you need to save to get it.

Physically, we talk about where the cash goes.  Remember, they are getting five one-dollar-bills each week, so it adds up.  I bought them little plastic storage units for screws and nails and things like that from Lowes.  They keep their money in those, and we call it their banks.  When we go out they need to carry their banks with them in case they want to buy something.

I also set up bank accounts for them.  Most banks allow something for kids which waives all the low balance fees.  That’s what we did at Bank of America.

For the bank, that’s a bit of a ritual where I take them and make sure they handle the transaction.  They have to take the cash out of their bank, count it, and give it to the teller.  When they’re done, they ask for a receipt with the balance on it.  It’s important to me that they physically handle everything so they understand it all.

Generally, they hate going to the bank because that means they “don’t have their money anymore for toys at Wal-Mart”.  That’s a bit of a miss and a concept we’re working on. 

I also try to stress that banks keep their money safe.  This became real for Mini Fox who lost his bank with about $70 in it.  He was sloppy with it and not paying attention and lost it.  Yikes!!!

I have a feeling I know where it is, but I’m content to let him painfully stew on this one for a while.  Hopefully he’ll remember this feeling and see the value of protecting him money at a bank.

Dang.  This one is already at a thousand words.   Why don’t we split this into two posts and later in the week we’ll talk about how I have introduced stocks to the cubs.

See you then.

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