Teaching Kids Financial Literacy Skills
I want to teach my children to handle money responsibly so I polled the money-savvy moms that I know to get their take on allowance. I got lots of great advice, but I found Mom Friend Sheri’s advice to work for me: weekly allowance is based on their age (a dollar a year) and earning allowance is based on doing a couple daily age-appropriate tasks.
The next hurdle was determining the tasks that the kids bought into.
We settled on these chores:
Age 7: Feed the dog 2x a day and straighten up the TV room.
Age 9: Clear the table after dinner. Everyone brings up their own dishes, but clear the rest of the food and condiments. Put the leftovers in containers and place in the refrigerator. If the table is sticky or gross, wipe it down.
Age 11: Load the dishwasher after dinner. (I unload the dishwasher before she loads).
Earn an easy $5: gather up the trash throughout the house for dad or clean up the playroom. If the playroom is truly a disaster, the ante gets raised. Sometimes I try to hire them to weed the lawn, but I rarely get takers. Finally, I pay $5 for a perfect spelling test at school (long story on that one and don’t necessarily recommend this!)
In addition to the allowance income stream and the extra tasks optional income stream, my two older kids also try to get neighbors to hire them as mother’s helpers, organizational assistants and back up dog walkers. They also get money from their birthdays, Christmas and the tooth fairy. Most recently, the girls have been selling duct tape wallets and purses and sold lemonade in front of the house.
Now that the kids have income, they need to learn to put it into buckets: spend, save, and donate. The spending part is easy. The donate part is easy too. It’s the savings part that can be in conflict with the spending that trips up my kids and thus the savings results for each child is remarkably different. Our middle child is clearly the most money savvy. She is a great saver and a ruthless bill collector. Our oldest and youngest are more blasé with money and spent it more freely.
I wanted to incentive them to save, so I followed Capability:Mom‘s advice and match their savings account dollar for dollar. My middle one is all over this (of course!) and this new program has helped her siblings to stick more money into their savings accounts but since we don’t go to the bank very often and the statements via hard copy come quarterly, the excitement to save falls to the wayside.
I discovered PayOff.com through a business school friend. It’s a site that lets people set financial goals (pay off credit cards or mortgages!) using a model of online gaming to earn prizes. In short, it’s a fun, non-intimidating way to get save more! Thought it’s not intended for children, I thought this is actually perfect for my kids. The site lets them track their savings and watch it grow. The games make financial goals real and fun.
It’s never too early to teach kids how to handle money and I actually think that they need these skills before they go off to college and this is not a topic that is covered at school! How about you? How are you teaching your children about money? Please share your great ideas!
p.s. Here are also some great books that we read at home on money.
p.p.s. Thank you to readers for these great suggestions!
The New Three Pigs: Creating Happy _ Please & Thank You!
Thank you to Mama C and The Boys for this great piggy bank recommendation:
To view any book more closely at Amazon, please click on image of book.