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Having 3 kids of very different ages and stages means that there is virtually never any overlap in my life. No “killing two birds with one stone” here. Their needs, problems, activities and availability could not be more disparate – and probably always will be.
That said, I have pretty much parented them all with the same rules, goals and expectations (though Conor will say I let Noah get away with WAY more, and Chelsea will say that I indulge Conor the MOST. So there’s that.).
This is perfectly exemplified in the way I’ve taught my kids about money. While each of them is in a unique stage of their “financial lives”, they all started from the same place.
When Noah turns 7 later this year – as I did with Chelsea and Conor – he will get an allowance. I’ve never bought into the notion that children should get paid for doing basic/everyday household chores – making the bed, setting the table, emptying the dishwasher. These are all things that help the family. We all do our share and there should (in my opinion) be no “price tag” assigned to it. Though Noah already has some (unpaid) minor chores and responsibilities, I use allowance as a tool to teach fiscal awareness, starting from a young age.
The kids’ allowance is divided into 3 categories – savings, spending and charity. They can use envelopes, jars, wallets, shoeboxes, whatever. The savings is tucked into a bankbook (they also open their own account at age 7), and we periodically go to the bank to deposit. When the charity box/jar/whatever gets filled up, the kids choose where they want to donate the money (which I then match). And the “spending” is theirs to do with whatever they choose. They can blow it all at once, or save it up for something special. Having a portion of their allowance that is 100% in their control is a good lesson in “instant gratification”, versus saving for something truly coveted.
During the kids’ grade school years I look for as many teachable moments as possible. For example, I would tell Chelsea how much I’ve budgeted for her clothes for the season. It was then up to her to decide if she wanted fewer pieces from the stores she really loved (which were invariably the more exclusive ones), or more from a less expensive store. Small lessons like this give kids awareness – and ownership – over the spending process.
The high school and college years are when the kids start making money outside the home (both kids always had part time jobs), and learn about managing debit and credit cards. They each have their own cards (linked to mine), and have learned how to keep track of bank balances, spend responsibly while away at school, and earn their own money to finance the “extras” that they want.
And now that Chelsea is out on her own we are working with her on savings, savings, savings. She has a good job, but she lives in Manhattan – so there’s not a whole lot left of her paycheck after rent/food/bills are paid. That said, she has a 401K through work and we have set up an external account that will automatically withdraw money from her paycheck each week. We’ve found this is the best – and frankly, only – way that she will save on a regular basis.
So I suppose the bottom line is that starting early is key – so that your kids are “money smart” from a young age.
Of course when Chelsea and Conor were little I did not have the internet to turn to for resources – I just figured things out on my own. Now there are countless articles offering great advice on teaching kids about money. I especially liked this one over at Protective about how to talk to young children about spending and saving money. And this one too, on teaching kids how to budget.
So how do YOU talk to and teach your kids about money?