MONEY AND KIDS: TEACHING FINANCIAL RESPONSIBILITY
There are only two days left in this school year... jump for joy with me. I'm sure you all, if you are parents, have been busy planning summer camps and family vacations to make sure you keep the kids busy over the summer. I finally have all of Amira's plans together and I happen to squeeze in one more little "at home activity" for this summer--TEACHING HER ABOUT MONEY. It's imperative for me to guide her and my job to teach her about financial responsibility. I don't want to read her blog in her 30s making financial challenges to save emergency funds. If your child is between 7-9, now is the perfect time this summer to get them on the right financial path to prepare them for their little future.
It's imperative for me to guide her and my job to teach her about financial responsibility. I don't want to read her blog in her 30s making financial challenges to save emergency funds. If your child is between 7-9, now is the perfect time this summer to get them on the right financial path to prepare them for their little future. Here are a few things I started with Amira...
START WITH AN ALLOWANCE
We really buckled down at year 9 with the year of "work for it sista". Basically, I was getting tired of running in Target telling her don't ask me for anything, I spend $20 on slime supplies and then she wants more. The "Work for It Sista" campaign began-- which means that if she wanted something just for fun, it was up to her to save and figure out how she'll get it.
HERE'S WHAT YOU DO: Start giving your child an allowance on a weekly basis. The exact amount depends on your household. Many financial gurus say a dollar per year of age, so you might want to start your kid with about $6 a week. Some experts say allowance shouldn't be tied to chores. You're supposed to teach them about mananging money not to pay her for things they should do anyway like household duties. I agree! But I still give her allowance for keeping her room clean and reading extra books and helping me do garden work etc.
OPEN A SAVINGS ACCOUNT
We upgraded from her little pink piggy bank with the tulle skirt to a big girls savings account this year at her birthday. The piggy bank no longer worked for her and it was time to allow her to really "see" her money grow. By age 9, I felt she was old enough to really grasp the concept of saving money for items she wanted.
HERE'S WHAT YOU DO: Go to your bank and open a custodial savings account with about $30. We started with a little of the money she had left over from her birthday. I walked her through the entire process of going into the bank, completing deposit slips and keeping a record. Here's the thing, don't let them withdraw money just because -- if your kids want to save up for a purchase make them sit down and discuss the budget etc with you. Amira can make as many deposits as she wants but we don't run to the bank for withdrawals.
SHOW THEM HOW TO MAKE THEIR MONEY WORK
In many households, talking about money isn't something we really involve the kids in. So they grow up not really understanding how to make money work for them or how to be disciplined with money. Over the past few years of working on my own finances, I developed a system that works for me and now sharing the same disciplinary concept with Amira.
HERE'S WHAT YOU DO: Set a system either through a budget system, jars or a banking system and use the percentages to allocate money. They can't move money around to different areas. Every allowance her Dad and I pay her via CashApp and cash. Her dad sends his allowance portion through CashApp and I give her cash. I then make transfers directly into her account so she can check on the mobile banking app. She knows the amount and has to sit down with me every Friday and tell me where her money goes. So for example, Amira gets $20 allowance weekly.
She knows she can only spend $10--PERIOD but she has the choice to save the whole $10.
$2 goes to savings
$2 goes to tithing
$4 investing for her little store and eventually stock
$2 giving including buying gifts and cards or her Mommy a sprite lol.
All of these lessons and financial disciplines have really taught her the value of money. She no longer begs for me to buy slime--she actually uses her own money. The even better thing, she doesn't like to spend or move anything from her savings. She has become obsessed with watching it get bigger and bigger. I can't think of a time when she has asked to go to the bank.
DO YOU HAVE ANY FINANCIAL MONEY TIPS FOR KIDS YOU'D LIKE TO SHARE?