May 7, 2010
Teaching Kids about Money - Part II
IconTeaching Kids about Money by Jill Cooper www.LivingOnADime.com ( See Part I for the Steps One and Two .) Step three is to be sure and teach your child about savings and tithing. I will never forget the first allowance I ever received. I was about 7 years old and my allowance was a quarter. I remember two things about that day. The first was that my mom said that out of any money we earned, we were to give 10% to God. I didn't know about percents at the time and had to ask how much 10% of 25 cents was. She said it was 2 1/2 cents. I remember being confused and asking how I was to give half a cent. Then she said the second thing I will always remember from that day. I couldn't give half a cent, so I should give 3 cents because that extra half cent would show our thankfulness for all of the many other things that God had given us as gifts that weren't in the form of money. To this day I have always given my tithe without hesitation and I round it up to an even number. Because there are so many extras that God has blessed me with other than money; the sack of tomatoes from the neighbors garden, the used car someone sold me at a discount, the meal that was brought to me by a friend when I was sick and so on. Do you see what a big influence my mom's words and actions had on me? She was my best example as you are the example for your child. As far as savings goes, I always tried to teach my kids to tithe, save a little and spend a little. I have found though that the best way for a child to learn about saving is through the "hard knocks" of life. Maybe for a child, I should change that to the "soft knocks" of life. ;-) There is no better way for a child to learn to save than for that child to quickly spend all of his money at a bubble gum machine and on candy bars and then see a sibling, who has carefully saved, be able to buy a really cool toy the next time they go shopping.Another way for kids to learn about saving is, when they desire something very much, to have mom or dad tell them to save their money for it. You can't break down and buy it for them because you will defeat the purpose. It's hard I know. It's even worse being a grandmother and not breaking down and buying them everything they want, but after a while you will come to realize how exciting it is for a child to save and save and then finally reach their goal's end. How much should you pay a child for allowance? My first quarter was enough for me to buy four Hershey's bars with almonds, to tithe and to save a couple of cents. I thought I had died and gone to heaven -- four whole candy bars! For this reason, I have always regulated my children's allowance to make sure that they have enough money to buy four or five candy bars. I wouldn't want to say, since some think I'm an expert in finances, that my whole belief system revolves around the price of candy bars but hey, if the shoe fits, I must proudly wear it. Of course, as the children grow and take on more responsibilities they should get gradual "pay raises" in their allowances. Just a couple of closing thoughts: With more money comes more responsibility. Keep the amount of money you give your children in proportion to how responsible they are. This will help them to learn to use their money wisely rather than to waste it because they have more than they know what to do with. In the same way that you wouldn't give a ten year old a new car to drive because he isn't responsible enough yet and doesn't know how to use it properly, don't give your children more money and things than they can responsibly handle. Teach your children to use their own money to buy those things that they want so badly, rather than buying lots of things that you can't afford. This will this teach them how to save, how to be more discerning when presented with an opportunity to buy something and how to care for things better and appreciate the things they have more. Lastly, but possibly the most important: teach your children to use a small part of their money to buy gifts and to give to others. This could include anything from buying a family member something little at a garage sale to giving 50 cents to the humane society or to that special offering for missions at church. Remember, the whole object is to learn to be wise stewards of their money and to be givers not takers. Jill Cooper and Tawra Kellam are frugal living experts and the editors of www.LivingOnADime.com . As a single mother of two, Jill Cooper started her own business without any capital and paid off $35,000 debt in 5 years on $1,000 a month income. Tawra and her husband paid off $20,000 debt in 5 years on $22,000 a year income. Permission granted for use on DrLaura.com.

Posted by Staff at 1:36 AM