Spring 2006
My 11-year-old son Jonathan's self-appointed job during a recent grocery store trip was to buy items for his sister and her new husband as the newlyweds set up the pantry in their first home.
As we made our way toward the checkout, Jonathan asked, "Can I go through the line with my stuff by myself?" I agreed but, after a few minutes, I heard a commotion in his lane. "What happened over there?" I asked when he finished.
He smiled broadly. "Well, my total before coupons was $28.60, but afterwards it was only $1.80! They had a hard time believing I could save that much!"
Jonathan had learned how to save money in the grocery store as well as budgeting skills and the value of a strong work ethic.
Kids Need Rules
One of the most effective ways to teach kids about money is to help them earn it on their own, but it is important for parents to provide needed guidance. These tips can help you raise fiscally fit kids with a strong work ethic:
Safety. Make sure your child knows how to operate safely any machinery he or she may use (lawnmowers, edgers, pool equipment, etc.), and know the people with whom your child will work.
Commitment. Consider requiring your child to keep the job at least a year and discuss in detail the activities he or she would miss (i.e. basketball, baseball, soccer, music lessons, camp, ballet).
Substitutes. The child needs to have a substitute ready if he or she cannot do the job due to vacation or school commitments. Make sure the substitute has high standards and is reliable.
The job comes first. In the case of a conflicting event, mom and dad must have the final say on whether the child can forego the job for the other event. This can be difficult for your child as he or she realizes that holding down a job sometimes means saying no to fun stuff.
Management and responsibility. Consider training your child to save 10 percent and to learn how to manage the rest responsibly. This means that the child must pay for supplies such as items for a lemonade stand or cleaning products for a car-washing service.
Community service. If your son walks dogs, encourage him to walk the dog of an elderly neighbor for free. If your daughter babysits, suggest that she offer a free night out for a mom whose spouse is deployed. Your young entrepreneur may discover that this kind of work is the most gratifying of all.
Budgeting Isn't Boring
Fiscally fit kids also should acquire the ability to budget money. Budgets for kids don't have to be dry and boring - they can be fun!
Here are some ideas you can use to teach your child to budget. And take note: In all these cases, you give the child the money but he or she manages it - and he or she can keep any money that is not spent! This encourages wise management and motivates frugality.
Restaurants. When you go out to eat, set a predetermined (and fair) amount your child can spend on the meal. He or she may choose to drink water or eat dessert at home in order to save money.
Fun days. The next time your family goes to the movies, the zoo or a theme park, set a budget for your child. When the money runs out, it's gone. He or she will learn how quickly money can be spent when not careful. You will need to guide younger children in this exercise and coach your older child while letting reality provide the best lessons.
School supplies. Set a budget each semester to include backpacks, lunch boxes and all supplies. It is amazing how a child will lose fewer items when forced to pay for them out of his or her own budget. At the end of the semester, the child gets to keep what is not spent.
Clothes. By the time your child is a teenager, consider implementing a clothing allowance or budget. The challenge is to coach the child's choices without nagging. By the time the money is running out and he or she is running around in holey socks, you must be prepared to stick to your guns without shooting yourself in the foot!
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Ellie Kay is an author of eight books, a national radio commentator and a motivational speaker at military events. Her newest book is "The Debt Diet" (Bethany House Publishers, 2005). She is the wife of a fighter pilot and mother of seven children. To receive Ellie's free newsletter, browse money-saving tips or invite her to speak at your military base, visit www.elliekay.com.
Related articles:
It's Never Too Early: Teaching Money Management Skills to Children
Financial Skills for Children: Teach Your Kids About Money
Common Cents: Teach Your Kids The Value Of A Dollar