Kids and Money what you need to know

This entry is part [part not set] of 2 in the series Kids and Money

Kids and Money

Kids and Money what you need to know
Teaching kids about money

Last week I started to write a nice simple article about kids and money. That article ended up more about our relationship with money and less of a “how to”. You can read it here. So, this week I will try again.

Teaching your children about money is an incredibly important. Many of us grew up in homes without formal training on money. Without an example from our own parents what we end up teaching our kids by our example. Your kids will pick up on the way you think about money, good and bad. We should try to teach our children good habits and how to think about money.

Here are some topics to think about when it comes to kids and money:

Teach them how to give early

Early on we got divided piggy banks for our girls. This hopefully teaches them that their money is for different things: savings, giving and spending. We help them divide up their money as they get it so they will understand what each different section is for. Setting that money aside to give makes them excited to give when the need arises. They have offered to buy gifts for the girls we sponsor through Compassion international. This is the type of thing we hoped for when we started training them with money.

By doing this now we hope that it will be more natural to them and that they will not be so “possessed by their possessions” money will simply be a tool at their disposal to use for God’s purposes and not something to be hoarded and lusted after…hopefully.

Allowance: Given or earned?

This is a big question: Should you give an allowance to your children, no strings attached or make your children earn their money? I have seen a lot of good articles on both sides and I have seen families that I love and respect do it both ways to great success so I don’t actually know that I can offer much wisdom on this topic, but to know your own children. Each of these methods can have different effects on children and you will have to watch and learn and even perhaps change your own views on what is best based on how your children learn.

We have always had chores for our children to earn money. We currently use the Accountable Kids chore system and it has helped our girls not only to get all their chores done, but to start to learn how to relate an amount of work to the things they want to buy. It has worked for us but we are by no means under the impression that is a perfect system. We are thinking about combining those chores with a standard rate allowance to give them an idea of how to budget with a standard income.

How much of their own money to they have to spend?

I have know of families where the kids had to buy ALL of their own things, clothes, food, toys everything. These kids worked hard and were paid well for their work and they were expected to spend that money on necessities and luxuries. I have also known families who gave their kids money and never gave them the opportunity to spend it. Then how do you help them to spend it wisely? Do you let them waste it on cheap toys that they will break or lose in days? (Yes, it is what they really want right now but it is stupid!)

I think there needs to be some sort of balance here but I don’t claim to know the right answer. I bring it up more as food for thought.

I would love to hear opinions on any of these topics drop a comment below on how you handle these issues with your kids or how you think you should.

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Kids and Money what you need to know