Any thinking adult knows children should be taught about handling money, but where do you start? How? When? Money experts agree that children must be taught about money as early as age 3.
You start by giving them an allowance, usually their age in dollars per week, or half of that. Dave Ramsey advises against an allowance, but we have chosen to give one because it is one more way to discipline them. Back talking? That will cost you a dollar from your allowance. Refusing to do chores? I will have to take some of your money to pay your sibling for doing your work.
By the way, we don’t link allowance to chores. It’s two different things. Should allowance be tied to chores? You decide after reading this debate on the Wall Street Journal.
Chores are split into two categories: Continue reading
To teach them about money, I was going to invest in Dave Ramsey’s Financial Peace University Jr. program, but then I realized we have a philosophical difference. (affiliate link) He says no allowance and he pays his children for all chores. He calls it “commission.” I understand his reasoning, but I also understand mine.
We decided to give our children an allowance so they can learn about the three jars and categories (Giving, Spending, Saving) and, then, we pay for specific chores. Real life is like this: you don’t get paid for doing your dishes, but you get paid for using skills to produce widgets for people. Once you have this wad of money, you need to have good money habits at your finger tips already.
Providentially, I found a great book from Crown Ministries at a used curriculum fair, for $1: The ABCs of Handling Money God’s Way (affiliate link). As you can see, you can get it for about that same price from Amazon as well.
So you have some choices to make. Then, the key is to be consistent.
We pair all this up with the Accountable Kids program. We started recently with this whole allowance/money education, but we have been doing Accountable Kids for four years now, in different variations. I will have to get back with you in a few months with an update about how the money part works. So far so good.
The kids are already changing their attitudes toward purchases. One of them is saving all his money, putting nothing in his Spending jar, after putting his tithe in the Giving jar. He wants to save for a bigger purchase. The other kid is already asking for smaller toys, because… now it is real. There is only so much money available in the Spending jar. I like it when reality discipline does the job for me.