One of my goals for the year is to teach my kids how to handle money and respect it. The best thing my parents ever did for me was to deny me the things I wanted except when I requested them for birthdays and Christmas (they would buy me candy bars once in a while). Still, I wasn't spoiled. They would give me a few things that I asked for, otherwise I would earn an allowance and had to spend weeks saving for a Barbie doll. Back then I made $1 per week. A Barbie was about $10, so I had to save for ten weeks. I knew if I spent any of that, it would take me even longer to get the Barbie, so I became quite good at self-denial.
At about age 10, I decided to start saving for a car because I knew it would take me a long time to do. I knew my parents wouldn't just buy me one when I turned 16 and I didn't believe they were obligated to. At age 11 I started babysitting for $1.50 an hour. Yes, it was very slow going, but when I was 15, I had saved $381 and I bagged my plans to buy a car when I had the opportunity to go to Austria and do an exchange with a girl there. I was in my first year of German class when our teacher asked who was interested. Surprisingly, I was the only one and all I had to do was convince my parents. I told them I would give them everything in my savings if I could go. The flight was $729 and my host family would cover everything I needed there. They said yes and they covered the other half of my flight. I'll be grateful for that forever. It was a good decision. I will have that memory forever. Whatever car I would have purchased probably would have been the bain of my existence, just like the car my husband and I had when we were newlyweds.
This is a story I love to share with my kids. They're quick to blow their money on candy and I want them to develop some good habits. I plan on opening bank accounts for them and teaching them to "pay themselves first", then they can spend their money on what they want. With college and church missions in their futures, they have a lot to save for. I do want them to have fun too along the way. On each payday, I would like to put a set amount in their accounts for special jobs they help with and then they can watch their accounts grow. I had such a great sense of accomplishment as a kid when I earned my money and controlled my spending.
This last year I did a food budgeting challenge with my kids. I added up what we spent on groceries for the month and divided it per person. Each of my boys had to make a menu for the week, making sure they had fruits or veggies with every meal, and they were able to make decisions like going to school early to have free breakfast (which they usually complained about). Anything leftover, they could buy whatever they wanted. They thought $33 sounded like a lot of money for the week, but they had to change their menu when they saw how much it was to buy a bag of chicken, cheese, condiments, etc. I did allow them to borrow a few items since I don't buy every oil, seasoning, and condiment when I go shopping. I was mostly trying to teach them to conserve the food they ate since they were taking large amounts of cereal and milk, leaving it to go to waste on the table. I wanted them to experience the responsibility of stretching their own food out all week, which I labeled with a Sharpie. Unrefrigerated items were stored in a box on top of the fridge and each of them had a separate week to do their challenge. It would have been unmanageable otherwise.
In addition to shopping, they had to learn how to cook their own food and had to eat quite a bit of leftovers. When each boy's week was over, they were happy to have a meal with the family and I think they appreciated more the work my husband and I both do to put food on the table. They have also become very conscientious about the cost of groceries, now with the habit of checking the price per unit so they know what the best deals are. They also know how the little things add up quickly. The experience was a life changer for us and they are more understanding now when I tell them something just isn't in our budget. I don't want it to be a negative experience by telling them, "We can't afford that!" Instead, I tell them what our financial goals are and that we have to stay within our budget to meet them.
What are you doing to teach your kids about money?
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