Before I get started, I want to share a story. When I woke up Monday morning, I had some ideas for a blog in my mind but nothing in stone. I went to the gym (as is my routine) when I noticed a magazine (maybe it was the Wall Street Journal) There was an article that dealt with retirement myths. It was well written and I thought writing a money article for parents may be a good idea.
Later, I was looking through some blogs. I came across a new one with an outstanding post by Joyce Wheeler titled Teaching Children About Finances. (http://networkedblogs.com/hy4SU) I highly recommend it.
Finally, I received an email from our local chapter of All Pro Dad. It said that the next meeting will have to do with striking a balance between children saving and spending their money. (There comes a point where I wonder whether someone is trying to tell me something)
Money is a pretty long topic to deal with so here’s what I learned at St. Joseph Children’s Home and how I applied the lesson in my home. Before I get into my stories, I promise you this. Most schools do not teach money sense to any great degree. I suspect one reason is that it is not covered on standardized tests to any great extent. So here’s the question. Who will teach your children how to handle their money if you won’t?
At St Joseph, we used fake money called Luckbucks. They were earned based on chores and behavior. Even our 4 year old residents received these. If your kids are small, you don’t have to use real money. Luckbucks were used when the children had group outings or wanted to play Nintendo. Looking back on it, we probably underutilized them although they were still effective.
I believe children should be allowed to earn money but they should also be forced to spend it. Usually what I see are kids who earn money but mom and dad still pay for everything. The point of money is not only to accumulate it but to spend it wisely. Now, if a child chooses not to spend their money after weighing their options, that’s great. It’s the discretion of the parent in determining when their children should be using their own money.
I had a child at St. Joseph I’ll call Daniel whose sole purpose with Luckbucks was to save them. He never spent his “money” because he wanted “to be rich.” In some small way, I hope his attitude towards Luckbucks transferred to life after St. Joseph. If that’s the case, he could retire very early in life.
Contrarily, my oldest child saves but he has two conflicting goals. The first is to buy all the things he likes at Toys ‘R’ Us and the second is to save until he accumulates $100. (This is his Holy Grail of cash) A while back, he saw a truck in an advertisement that he had to have. I believe it cost about $25.00. He asked me if I would get it for him and I refused. (He has over 20 trucks in his playroom) I told him if he wanted the truck, he’d have to buy it himself. After some deliberating, he decided to make the purchase.
The reason I decided to tell you this story is because I can’t remember the last time he actually played with the truck. He’s also brought up the goal of saving $100.00 on multiple occasions since then. The irony is if he didn’t buy the truck, he would already have the money! Of course, I remind him of the truck when he brings up the savings goal. I am not condescending but I want him to realize the financial choices he makes are a big deal. As he gets older, I’m sure I’ll hammer this point even more.
Thanks for reading and passing this along to other parents. It is greatly appreciated!
Also, during the month of May, Lulu.com (the distributor of Tantrums, Troubles, and Treasures) is knocking off 15% on their production costs so I am passing the savings on to you. When you purchase the book, please enter the code maysave305 to get your discount. I really appreciate Lulu for doing that! Here’s the direct link.
Have a terrific day!!!