Special to the Financial Independence Hub
When we had kids, both my wife and I discussed how to be intentional about teaching them about money. We’ve read books, articles, and looked at resources online. We wanted to be sure that they knew what a healthy relationship with money looked like in the areas of faith, family, and work ethic. We wanted them to know what a truly wealthy life looks like.
Our plan to do this was to model handling our money responsibly. And we wanted to give them real-world opportunities where they could begin to make financial decisions on their own, at first in a supported environment, and later on, independently.
With our first child, our daughter Gemma who’s getting ready to turn 5, we’re in stage 1 of teaching her to be a wise manager of her money. She’s being supported, taught and encouraged to make good choices with her money. She’s also being given lots of opportunity to fail with money. Also known as non-catastrophic failure, it is an essential element to learning, and one many kids are being robbed of by overprotective parents.
So how are we doing it? By teaching her the basics of how to give, save and spend…in that order.
Gemma has been on commission for about four months and it’s been going quite well. Every Saturday she gets paid $1.50 in six quarters. Some people may think that’s cheap, but I prefer frugal.
My wife decorated three old loose tea containers with fancy wrapping paper and glitter letters to store her bounty.
The first thing we do when she gets paid is put 25₵ in the Give container. As people of faith, we tithe a percentage of our income to our local church and other charities. We want to instill the value of generosity and gratitude in our children, and so before we’ve spent or saved, this money goes into the Give fund.
Recently, we went out and used her money (she has stockpiled $4) to buy some gifts for an Operation Christmas Child shoebox. Before we went out I showed her a short video and we talked about how some kids don’t have much money, and how we can give to them. It was awesome to see her picking out the items for the box and growing her giving muscles right before my eyes.
The next place money goes is to her Save container. It gets three quarters, the most of any jar. Before she’s touched any cash to spend, this “invisible money” disappears into her saving fund so she doesn’t even miss it.
We want to impress upon her the value of delaying gratification. We want her to experience the joy you get from passing on the temporary good feeling of spending now, for the amazing feeling of satisfaction and self-control you have when you buy something you’ve been saving up for.
Right now, she’s not saving for a car, university, or a down payment on a house. We’re not that crazy. She saves for larger purchases that she wants but can’t buy on impulse and that we’re not going to cave in and get her on a whim.
A Teachable Moment
A few weekends ago, she and I were hanging out and she let me know that she had seen a Spirit Riding Free toy that she wanted to buy. (For those who don’t know, it’s a Netflix show, which is pretty solid for little kids. Continue Reading…