Money Lessons My Kids Taught Me

My family reserves one night a week for just us.  We try not to book anything else so that we can do an activity together, like swimming, playing board games, and sometimes holding a family council.

This past week I was taught an important lesson concerning how to teach my kids. It came in 2 parts.

Part 1:  For our family night my wife and I decided to help teach our children about budgeting and saving money.  We went through a brief discussion about separating their allowance (based on chores done properly) into spending, savings, and long-term savings.  We used lots of examples of things they could save for that would take a few months to do (iPod Touch, horse riding lessons...).  We tried to emphasize that by saving some of the spending money they would achieve their goals more quickly. We then decorated 3 boxes for each child, giving them a place to store their money as they saved it for the 3 different purposes.  I though it went pretty well, until we were starting to clean up and the 3 oldest immediately asked if they could go to 7-11 to buy a slush.  It was a "slap my forehead in frustration" moment.


Part 2: We pay our kids an allowance based on a chore chart.  If they do a chore each day, they get a sticker for that chore.  After a month we count up the stickers and pay the kids.  Some chores pay a bit more (feeding and cleaning the rabbits pays more than unloading the dishwasher) and the kids can trade with each other if they both agree on the deal.  A few of the kids always trade off the harder chores for the easier ones, but the easier ones pay less.  One child in particular doesn't mind doing the harder chores and tends to get paid a fair bit more because of it.

This past week my wife paid the kids.  Usually we just count everything up and pay each child one on one, but this time my wife put the money on the table and called all the kids together.   She paid them in front of each other and told them the amount each one received.  The one child received twice as much as the others. The others, of course, didn't think that was fair, but my wife then listed off all the harder chores the hard worker had done over the previous month and it was like a light bulb turned on for all the kids.  Even the hard worker hadn't really thought much about how much the chores paid, she just liked doing the rabbit work, which pays more.

What a difference that lesson has made.  Our oldest actively has looked for chores to do all week, and has done an excellent job of them.  He now has firmly linked hard work and a job well done to be rewarded appropriately.  There are some chores the kids have to do just because they live in the house (laundry, clearing their own plates, yard work...) but it is nice to see them catching onto the value of a good day's work for a good day's pay.

So, back to the lesson I learned:  It's important to talk to the kids about money, but it is more important and meaningful to show them those lessons about money.   Now I have to figure out how to do that consistently so that they don't make all the same money mistakes I have, and hopefully they will be far better off for it.  Jerry