Friday, May 27, 2011

Friday Forum: Kids and Money

A gamut of important questions for you today...

How do you teach your children about money?



What about teenagers?

Who buys the clothes/movie outings/car/gas/etc?


What are your philosophies on this? How was it done in your family growing up? How are you doing it? How early do you start?


Anonymous said...

Read "Love and Logic" problem solved.

Abbie said...

I have no idea.

But it seems this money idea is super hip in the Mormon world and something I want to do: have our kids save up for their mission and then pay for it for them and give them the money when they get back.

That's all I got. Teach me!

Ria said...

Teaching kids about money is really important in my book. I think kids should have an allowance because they are part of the family just like they should have chores because they are part of the family. Jobs done above their regular chores may get extra cash payments. I'd start them as early as possible. A one year old can drop pennies in a jar before they understand why. It just becomes a part of their lives as they get older.
I was raised to first pay tithes (10%) and then myself. we put 50% in a bank account for college/mission and the last 40% we could do whatever we wanted to do. Did the same with my kids. Because I didn't pay them a huge amount, I covered basic clothes, activities etc. We pay for a movie the first time but if they wanted to go again it was on their dime... The kids learned about saving for a rainy day as well as budgeting their spending money to last through the month. Other things I did was to buy inexpensive gifts and let the little kids shop in "Mom's store" for birthdays and Christmas gifts at a greatly reduced price. It allowed them to get something a little nicer without going over their budget.
As long as the kids kept up their grades enough to earn the good student discount, we paid for their car insurance and provided a junker car for them to drive. When employed, they paid for gas but my girls were so involved in extra curricular activities there wasn't time for a job and school work. We opted to have their practice times take the place of employment and we paid for gas.
We encouraged our kids to work hard in school to get scholarships to cover college tuition and they are responsible for what isn't covered for tuition. (Dad's job provides a 1/2 tuition benefit as well). We have provided them with a laptop and paid for books and they cover their own living expenses.
So far this has worked in our family. My kids know how to budget, are frugal with themselves and generous with gifts and helping others.
As far as missions go, we did ask them to save 1/2 and we'd cover the rest. Turns out grandparents helped out as well so we saved all the kids money for them to have for college when they got home.
So that's my two cents. (ha ha. get it?)

Ria said...

One other thought...My brother worked in a bank through college. He said that on more than one occasion he had students that would come to him, overdrawn and say, "I can't be overdrawn. I haven't run out of checks yet." Yeah, I think that is what happens when parents don't start the kids early in understanding money.

Katie@a mom, a wife, and a me said...

Read The Bank Of Dad... it really inspired my husband and I to explain money to our kids, even if they are little and I tell you what my oldest just turned 7 and he compleatly understand interst and that money is more then just paper. The guy who wrote it (cant remeber his name..) even talks about how they handled clothing and stuff... we found it helpful. Our children have required chores, but we dont associate it with allowance (however they can earn extra money by doing extra jobs) I just highly recommend then book, and he is a really funny guy, oh and he has a great stock market learning tool too! Hope this helps!

Sally said...

My kids earn money for doing their jobs, which I know isn't a super popular thing to do, but it saves me from having to nag them all day long to make their beds and unload the dishwasher. We actually do the online job chart and they earn $1 for every 500 points...ya I'm super cheap. Right now I'm letting them decide how they want to spend it and it has been fun to take them to the store to pick out what they want to save up for. When they finally get to buy their item they are always so proud of themselves and make sure to tell the cashier that they are paying with their very own money.

Rachael said...

When I was a kid, my parents gave us each a "budget" every month that covered all the required expenses. We had to write down how we spent every penny and present our account books before we could get the next month's budget. It didn't take us very long to realize that if we packed our own lunches we could save the $$ given us for school lunches, etc. It always impressed me that my parents taught us how to be frugal and save without ever lecturing us about it--they just let us figure it out (some kids figured it out more quickly than others. :-)

jeanine said...

Growing up we got paid for jobs we did around the house. We used to fight over mowing the lawn because it was a high paying job! We were also expected to pay for our clothes, extra activities, and anything else we wanted. We always paid 10% for tithing and 20% to savings... the rest was for whatever we wanted.
I've started doing the same for my oldest (who is 6 years old). He gets paid 5 cents per job. He doesn't get paid for EVERY job he does around the house... some things he just does because he lives here :)
In my opinion I like this method better than "allowance" because it teaches children that they get rewarded for hard work. They EARN their pay. Starting young is great too because it gets them in the habit of paying tithing and saving.
I love what Abbie said about having her kids save up for their mission and then paying it for them. My in-laws did that for my husband. His entire mission he thought it was coming out of his savings and when he got home he found all that money waiting for him. He was able to buy his first car to have at college (which lasted through the first 7 years of our marriage too!) I will have 4 missions to pay for and would LOVE to do that for my boys!

Blogful said...

Can't wait to hear the responses! Something I am constantly wondering.

Growing up we had chores that we had to do, then there were extra jobs that got paid, like ironing & mowing. My parents would pay for a certain amount toward clothes. Like $20 for jeans. If the jeans we wanted were more than $20, we paid the difference. We had no allowance.
I think allowance is a good idea though: If kids can make mistakes with money and learn from those mistakes when they are young, they might be more likely to have good financial habits when they are older.

duck said...

Man, this one has been tricky for me to figure out! I've REALLY enjoyed hearing what some of you do, and what your parents did. I of course want my kids to be financially responsible. But I also want them to have the desire to give of their substance freely to those in need without it giving them an ulcer. Along with these great suggestions, I have some people in mine who I know that are very generous. I'm gonna ask them how they were raised when it came to money. And hopefully I'll figure it out. Thanks for the post and wonderful ideas people!!