Like many kids, my twin 7 year old boys can never just go to the store without asking me to buy them a toy or candy. I know this is completely my fault as I ingrained this behavior in them from an early age…”Mommy will buy you a piece of candy if you’re good for me!” Well, now that they are old enough to help around the house and just the smartest kids around (imho), I thought it was a good time to teach them the basics about money.
My husband and I agreed that $3.50 a week for completing their basic chores was a good start. I’ve heard some people doing a dollar for every year old they are so I took this concept and divided it by TWINS! In addition to their expected chores, I made a jar of chore sticks (thank you Pinterest) where they can earn extra money if they wish. Now that they are on their way to saving, we are now working on quelling the need for immediate gratification. Easier said than done!
Just like we have to pay tax in the real world, we make our boys pay a tax in the allowance world. From their weekly earnings, we deduct 10% of their earnings for ‘family tax.’ The amount one must pay to help Mom & Dad provide ‘public services,’ also known as food, shelter and transportation. This is to teach them to not count their chickens before they hatch.
With the 10% we take out of their allowance, we use that to help fund a custodial investment account (in addition to the $15 we deposit) and explain how this is an account to benefit them for their hard work. I allow them to choose their own investments and they will typically pick a stock from a company that they recognize either from a movie or toy they play with. I do this so they can watch how it moves and begin to become comfortable with investing.
After the family tax is deducted, the boys have a net amount to save. Each week we sit down and go over what it is that they are saving for. Again, the typical 7 year old response is candy or a toy. I would eventually like them to settle on something a little more specific so we can work on building our savings towards a goal but we’ll get there eventually. As it is right now, they take what they have and blow it every chance they get! I do have to say how proud I am though that they use their own allowance for the children’s offering at Church some weeks and are kind enough to share with their brother or sister.
There are some instances when we go to the store and when checking out, we are about a dollar short. Sometimes I do the whole speech, “well, you don’t have enough this week, you will have to save and come back next week” and other times I will give them a ‘Mommy Loan.’ I don’t do this all the time but I think it’s a great lesson to teach them that when they take out a loan, they are required to pay it back which leaves them with less and less going forward if the pattern continues.
I do all this so my kids have a basic understanding of money and to teach them about saving, spending and investing. A small part of it was self-serving so I wouldn’t have to hear them ask me to buy them something every trip to the grocery store but since they are so eager to spend it, it’s best to have a lesson on earning it first! Most importantly it teaches them the value of work.
2 Thessalonians 3:10 For even when we were with you, we gave you this command: “Those unwilling to work will not get to eat.”