“What Your Parents Didn’t Teach You: 2 Tips to Help Kids Understand Spending”
Teaching my daughter to save
My parents never taught me financial responsibility. When it came to money, the only thing I learned was to use credit cards and to make sure to have one for every store. It’s this lack of education that led to my financial difficulties now.
On a recent visit to Target, I made a frightening discovery. As we walked down the aisles, my four-year old daughter would point to things and say, “Mommy, I want this!” Although I was forming a great lifetime customer for Target, I could tell that my rampant consumerism was already rubbing off on her.
Looking to the future, I wondered what things would be like when she’s 14 and bombarded by peer pressure. Or what happens when she’s 24, off on her own and trying to maintain a lifestyle she can’t afford? I realized I wasn’t the only family member who needed to change her spending habits. To ensure my daughter doesn’t make the same mistakes I did, I’m starting her financial education NOW!
Jars for charity and savings goals
Teaching Children Responsible Spending Habits
For my four-year old daughter, we set up this savings system:
- Each week, she gets an allowance of four dollars for completing her daily chores (the amount is equal to her age)
- We use Sweet Leaf Tea bottles to split her allowance into four separate jars:
- 10% goes into her Charity jar
- 30% goes into her Long Term Savings Jar
- 30% goes into her Medium Term Savings jar
- 30% goes into her Spending Money jar
There have been some bumps as she learns the system, like the time she wanted to give her charity money to her cousin because she knew the jar was supposed to go to someone else. But at least she’s gaining a concept of money. It also forces her to make decisions about how she spends her money: Does she want to spend $1 on a hashbrown at McDonald’s or save it to buy a toy later on?
Money (or the lack of it) is not a secret
Because my parents didn’t teach me about money, we also never really discussed it. That could be why my problems with debt stayed bottled up inside. As my daughter embarks on her own financial journey, I want to make sure she has a better start than I had. Money (or the lack of it) shouldn’t be a secret. By talking about money with my children, we create a dialogue within the family that forces me to be honest–even with myself.
TALLBACK: What were some lessons your parents taught you about money? Or if your childhood was like mine, what lessons did they NOT teach you that you wish they had?
Sweet Leaf bottles make great piggy banks
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Awesome job as usual Rachel! I love that you put the ideas out there in the simplest terms. (Of course I also love the use of the Sweet Leaf Tea bottles-thanks for that!!)
Man, my mom tried to NOT teach me that if you didn’t have $, just go to the MPACT machine (yes, I’m old..) and itd’ be there. Turns out there ISN’T $ in the ATM if you don’t have any in your account.
My father, bless his no-longer-beating-heart, spent $ like it was going out of style and I am sure we would have lost our house if it hadn’t been for my mom always being the “bad-guy” aka the parent with reasoning. I can look back and see that I am my father’s daughter and hope that I can figure out a way to grasp these life-lessons before they suck me down the tubes. In-debt? For sure, but it’s getting better….
Rachel, your blog is awesome!!
Thanks, Maya!
Sadly I know I wasn’t the cousin she wanted to give the money to. She knows me as “Aunt” and I love it. Very proud of you. Your girls will be much better off for your efforts and won’t go through a lot of what some of us have in our struggles.
Hi, Really good blog on teaching kids about money, good on you!!.
We have a book and ebook you may be interested in looking at on our website.(Parents How to stop your kids from going broke) We are in New Zealand and trying to get families talking about money and raising the level of financial literacy in all children.
Keep up the good work – John