After our younger son got his first part-time job, we discovered that we hadn’t done a good job of teaching him how to handle money. Despite a regular paycheck, he was often short on cash. So one day I did a brief inventory on his spending habits. Turned out he went to a fast-food place every school day for lunch, a habit that he was shocked to learn cost him over $1,000 a year.
My last blog suggested that you could look at your kids’ allowance as a resource to teach them financial responsibility. But once they have that money, how do you teach them to be responsible with it?
Homeschool mom and blogger Amy Koons has a simple idea. Attach spending responsibilities to allowance money. The baseline expectation she and her husband have set for their kids is to give and save ten percent of each allowance payment. Beyond that, since their kids are young, spending responsibilities are pretty simple. She writes:
Currently, our kids’ main spending responsibility is to buy their own treats when they are out, unless we have specified that we will buy the treat, for a certain family outing. They also have to buy their own toys or other “extra” stuff, except for what we get them for birthdays and Christmas.
As your kids get older, spending responsibilities can be expanded to include age-appropriate things like gas, more generous giving, or technology. The key is to help them learn that irresponsible spending can have real consequences while responsible use of money can help them achieve tangible goals.
Koons offers these other tips:
- Pay allowance weekly.
- Don’t attach allowance to general chores.
- Pay a quarter per week for each year of a child’s age.
Do any of these seem odd to you? Check out her blog at Homeschooling Now to learn her rationale for them.
If it’s time to get your kids started on a saving program, online banking provides a great platform. Accounts are easy to open, manage and monitor, whether you’re living internationally as missionaries or in the states. Homeschoolers could even make managing these accounts as part of a simple money management curriculum for their kids.
ECCU members have access to various accounts that can nurture their kids’ saving habits. A savings account is good for younger children. It’s free with a $100 balance and pays higher interest than most banks. If your kids have more money to work with, a money market account might be a better option. And once they’re ready, they can look into a checking account and a debit card,
One other tip. As you teach your kids to manage money, do them another favor. Show them how to pack a healthy lunch too.