Financial Lessons: Give, Save, Spend

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We have said before that ‘parents are teachers.’  One important part of the curriculum is money management!  It is crucial that we teach our kids about financial principles, because the decisions they make about money will affect every step of their lives. Financial Principles are really “Life Principles,” in a lot of ways.

We want to teach our kids…

  • The importance of tithing
  • The benefits of delayed gratification
  • The value of hard work
  • Generosity

This is a relatively new area for us, so my question for you is: how do you achieve these goals with your children?  

  • How do you handle the balance between chores and allowance?
  • Do you give them the impression that they’re working to earn their money?
  • Or do you give them the impression that they get a certain amount of money because they are a member of your family?
  • Or some balance between the two?
  • If they don’t do their chores do they not get their allowance?
  • Or do you take the responsibility to make sure that their chores are done without fail?

These are all questions that we wrestled with as we made our current plan for chores and allowances. Last week we discussed our summer plan for the chores that they are expected to do. We split the chores in two categories, ones that are just the basic responsibilities of a human living in our home in one column. These are required without fail and we will make sure that they get them done. (But, we do expect them to be self-motivated and do them without being told/nagged.) The other chores are more like extras, and there will be some days where they don’t get them done.

Here is our allowance plan:

PDF:  PDF_Picture                                         Excel File:  GiveSaveSpend


Disclaimer: We gave you these numbers not because they are the right numbers but because they are the numbers we are using. Every family will have different needs, based on your own budget, and also based on how much your kids get from relatives and friends.   For example, if grandparents or other family members buy a lot for your kids, then you can scale back your own gift budget and also your own kids’ ‘spend’ budget.  If not, you can give more.  There is no ‘right answer.’ You also have to consider how much you can afford.  (Some of it is what you would have been spending anyway, but how much can you afford to spend?)

Disclaimer 2: We use these ages as our suggestion, but each child will develop at a different pace.

One of the principles we wanted to emphasize was teaching them about valuing money versus buying junk.  That’s why we made the vacation category, instead of each of them begging for a souvenir or a toy, they can each have a sufficient amount of money to buy their own small souvenir. This also gives them the satisfaction that it is something they bought for themselves. Same is true for birthdays for their siblings and for Dana and me. We want them to feel like they are buying us gifts, not that mom and dad are buying gifts for them so that they can practice being generous.

This year we are going to try a ‘back to school budget’ with our oldest.  The back to school budget is a way to not increase her allowance but teach her how to go to the store and spend within a set budget.  We are planning to tell Hannah that we have X dollars to spend on back to school clothes.  Then we will go to the store together and will pick out what we need and keep track of what we spend.  This will still be our money, not out of her allowance, but it will teach the concept of making choices within a budget.  Over the years we plan to expand this concept into other areas…we will still pay for the items but we will walk them through the process of spending within a budget.

Our ultimate goal is that our kids will be self-sufficient as far as life is concerned. Now I don’t mean that they literally earn enough money to provide for all their needs, but I mean that they will be able to handle the daily tasks of adult life. We have friends whose high school kids literally purchase all of their toiletries, clothes, gas, and entertainment out of a budget that their parents pay them each semester.  Our kids are currently 9, 7, 5, and 2, so the blog post about being fully self-reliant will have to wait for a few years. 🙂 But as Stephen Covey said, you begin with the end in mind. If we don’t start thinking about these topics today we are going to open our eyes some morning and have kids going off to college who may or may not have received the principles that we want them to receive.  We need to start small today and build slowly over the years so that the process happens naturally.

It is very important that our kids learn about money management.  We want to start them out at a young age so that they will make wise decisions with their money.

Please leave a comment to share your ideas with us and others!  And don’t forget to subscribe – one step and you are finished!  



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