Friday, March 22, 2013

Teaching Kids: Giving & Saving Money

Recently, our family re-instated a system of payment for the jobs our kids do around the house.  Some chores are expected of them, like keeping their room tidy, taking their dishes to the sink, and picking up toys they've taken out.  We don't hand out an allowance, because their work is inconsistent, and we think there's a better way.  You can read the original post here: Teaching Kids: Work Pays.

So, the kids have been busy lately trying to make money every week (and Mommy's getting a lot more help around here)! I love seeing how proud they are when they count up the quarters. They're learning the real-life lesson that money isn't free.  You have to work for it.

But now, we have to extend the lesson by teaching our kids the best way to handle their money. If all they do is spend their precious, hard-earned cash on bubble gum every week, they're not learning how to make the money work for them long-term.  They also don't realize how much good they can do, by giving a little away to others.  So, we need to show them how to save and give money. 
Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. - 2 Corinthians 9.7
 A tenth of the land’s produce, whether grain from the ground or fruit from the trees, is God’s. It is holy to God. -Leviticus 27.30
This week, we were so excited to receive a box on our doorstep containing three new Giving Banks:

This is a new twist on the classic piggy bank (There's also this version).  It has three compartments: a bank (saving), a store (spending), and a church (giving).  Dave Ramsey has a set of three piggy banks, but I needed to simplify our system.  We had used small Mason jars with our oldest before.  However 3 jars for 3 kids = 9 jars to keep up with!  And my kids had fun putting the stickers on the "houses." It's a great visual.

So now this is what our kids' money-earning, job-doing, financial-planning setup looks like:
It works great for Mommy, because I can see what jobs the kids have completed and can pay them when I get around to it.  I use one jar for each kid to put "Pay Day" money in until we can divide it up into their banks.  

How do we decide how much to save, give, and spend?  
  • Saving- 10% or as much as they want.  When they reach $100, we open a savings account for them to gather interest and help them earn their first car (Also a Dave Ramsey idea)!
  • Giving- 10% or as much as they want for church or any other good causes that arise.
  • Spending- 80%.  For now, this goes towards whatever googly-eyed kids dream about, but when they grow up, it's for all the expenses they concur, as well.
What are ways you teach your kids the value of money?


miller_schloss said...

K and J have been drooling over a toy catalogue the last couple days. I mentioned they could start earning money to buy things they want. I think it's time for us to implement this system!

Dani Byham said...

The kids have fun doing it and are kind of driven by their own motivations and goals. Takes some pressure off of the parents :-)