Raising kids in today’s society is a tough venture at best. I mean seriously, it is hard! They are surrounded by anything and everything right at their fingertips. They have cell phones, laptops, tablets, iPods, iPads, etc. They can order anything from Amazon and have it on the doorstep in 2 days.
Have you ever wondered how to raise your kids to be responsible adults who value money and don’t always have their hand out asking you for more?
I am pretty sure that not everyone agrees with our philosophy on raising kids when it comes to money. I am okay with that though. They are MY philosophy’s and what I feel is best in our situation. I thought I would share it with you and see if something here might give you an idea to use with your own kids.
The goal with everything on this list is to raise responsible, independent, strong kids who leave home to start their lives. And once they leave – they don’t come back asking for money as an adult!
Five Tips We Use for Raising Money Responsible Kids
1. Chores. They are not punishment!
From the time the girls were small we started a chore system. When they were very young they would earn $1 per chore and could earn a total of $5 a week. Their total earnings increased as they got older and could handle more chores.
The big rule here was if they did the chore, they got paid. If they did not, they received no money for that one chore. We were firm and did not sway from it. Our younger daughter is still on this system. Some weeks she makes a good deal of money. Other weeks, when the lazy teenager shows up, she get nothing. It all depends on her effort.
Our oldest daughter has been shifted to a different way of earning. I plan to share about that in a later post.
2. Don’t ask me for money!
I know this sounds harsh, but stay with me on this one. The girls know that if they want something they will need to devise a plan, save for it, and then they can go buy it with their OWN money. We have done this since they were pretty young. It started with small toys or stuffed animals and has now increased to larger items.
Let me clear something up here. We do still pay for some things. Clothes, toiletries, school supplies, and most basic of the basic items they need. The word need and want are very different though. As adults we realize and understand this. Kids are still learning and benefit from these lessons.
The main thing we are trying to teach them is if they want something fun they need to work for it. I will not buy them everything they want. However, I will provide opportunities for them to earn money and in turn buy whatever exciting, sparkly thing they want.
What we have noticed is they rarely ask us for money. They are 13 and 15 now, and if they want something, they count their own money to see if they have enough. It is awesome! They will often offer to pay for their needs as well. It is fantastic to see kids that understand the value of money and how it works.
Furthermore, when they are finally ready to buy that special something, they really think about it before they do it.
When a child has to spend their OWN money, they think longer about letting those dollar bills go.
Here is a great read for parents who want to raise money smart kids:
3. We are NOT buying them a car when they turn 16!
I know, I am the meanest mother in the world. Try to see if from my perspective though. We are putting our child in the most costly piece of machinery they have ever had control over. It is very expensive! If they have been handed that car with no “skin in the game” then why on earth would they take care of it? When I say “skin in the game,” I am referring to them not paying for their own car. Or at least paying for part of it.
We have decided to do a matching program with both girls. I got this idea from Dave Ramsey, who did this with his children. So, if they save $500, I will match it with another $500 and wha la, they have a $1,000 car. Yep, not much of a car. However, if they save $5,000, then I will match it with $5,000 and they will have $10,000 to spend on a car.
It is pretty powerful to sit down with a teenager and let them look at the difference in a $1,000 car vs a $10,000 car. It becomes super motivating to get busy and start saving!
I cast no stones at those who buy their children cars. This is a personal decision and will vary from family to family. We decided that this was a good route for our children in an effort to teach them about the power of working, saving and then getting to make a purchase in CASH! It also teaches them delayed gratification. It has been hard for the girls to see all of that money for YEARS just sit there and not spend it. However, my oldest daughter is just a few short months from buying her very first car. She is starting to see the “why” behind all of that working and saving. VERY valuable lesson!
As a side note, buying a car in cash just feels different! It is painful to let the money go and it will make you think much longer before actually making that purchase. It is SO good for a teenager to save for that car, then go buy it with their own money. It shows them that if they can save for a whole car – then they can save for anything in cash!
4. Savings. It is not an option.
Remember #3 of this list? They are naturally learning about savings and they know they are required to save in order to have wheels on their 16th birthday. Beyond that first car purchase, we have already established the one expectation we have regarding savings. They will need to quickly put back $500 for their very first emergency fund.
Related Post: 26 Reasons Why You Need an Emergency Fund
It is so important to get them in the habit of having money put back. Many adults still don’t get this concept and live in “panic mode” when something goes wrong in their lives.
The game plan here is to show them that sometimes, unexpected things do happen and it is necessary to have money. Clearly if your children are still in high school then you wouldn’t expect them to pay for all emergencies. However, if they have a flat tire, have them pay for it out of their emergency fund. Not every time, but one time. It shows them what that fund is for and how valuable it is in surprise financial situations.
The goal here is to carry this habit into adulthood. It will be a huge benefit for them!
5. Boundaries. Set them up and stick to them.
I said earlier that we buy some things and the girls buy others. They know that. We have set up certain boundaries with specific activities we do as a family.
I could give you many examples on this one but I will give you the one the easiest one.
Movies. We love to go to the movies as a family. Both girls know that I buy the tickets and the overpriced popcorn. I normally have bottled water in my purse for them as well. However, if they want a $5 box of candy or a $6 blue frosty, that is on them!
I have watched them go through agony trying to decide if they actually want to spend their hard earned money on a drink that will be gone in an hour. So, they have worked out a deal. They share! Both girls love the fun, frosty drinks at the movies. So they buy one, split the bill, get two straws, and everyone is happy.
Let me establish something important here. I DO have money to buy the frosty. However, they really don’t learn anything when I hand them everything they want. It is SO good for a kid or a teenager to struggle with the decision of should they, or should they not make that purchase with their own money.
Teaching your kids about money while they are at home will keep them from coming back and asking you for money when they are adults.
Honestly, choosing the hard path now with kids and money will be a blessing in their lives long after you are gone. What you teach them about money while they are at home – becomes the financial path they will walk on for the rest of their lives!
Share below in the comments what other things you have done to teach your kids about money! I love new ideas. 🙂