The Allowance: 5 Ways Kids Learn To Value Money
In a world fixated with material things it is no surprise that children can easily feel like they are entitled to things. I’ll keep it real and say that I am probably part of my children’s problem when it comes to the, “can I have/buy me this” syndrome. I mean, no harm done when they ask for ten items at the dollar store. That’s only $10 dollars to keep the whining and begging at bay. While maintaining parental sanity in the dollar store is only for the short term, what are we really teaching our children about earning and saving money for the things they want?
The fact that I haven’t really taken out the time to teach my children that it takes work to buy things hit me the other day. My son had the audacity to ask for a new iPod when we just purchased one last year. When you think about it, whether the item is $1 or $100 the value of money still needs to be taught. I knew the struggle growing up, so subconsciously I think nothing of giving them what they want if it is within reason. I’m pretty sure this behavior is going to stop soon. Truth be told Mom, and Dad’s wallet won’t always be available for most children, so the earlier we start instilling right behaviors when it comes to the correlation of working and earning the better off our children are.
Here are five easy steps to begin instilling the value of money in your children.
- Create a point system: Make a chart outlining duties and chores and assign each task a point. Each point should correlate with a dollar amount. A dime, a quarter, a dollar, you decide. As tasks are completed place them on the chart in tally form creating a visual so that they can see how much money they’ve earned.
- Disclose the price of requested item: Ever ask a child how much a house costs? You may get a range of numbers but rarely are they even close to the actual amount. Children have no sense of pricing, and why would they. Pull up that item on the computer or show them in the store. Help them correlate that price with the amount of chores they would need to do to purchase the item. They’ll be surprised!
- Agree to meet them at some point: In my house it may take a year of washing dishes and taking out the trash to get that iPod. I won’t torture him that long but I will have to see consistent effort. If he comes up with $20, we’ll help him with the rest.
- Add interest: For older children who may “need” said item before they earn the actual amount, offer to pay for it in advance but let them know they will need to earn more than they originally needed and that is the cost of borrowing money.
- Let them do their own banking: Children as young as seven can open a bank account at many institutions with a parent’s name on it. When they earn money let them deposit it with the banker or at the ATM. Explain to them what the receipt means and help them keep track of their balance. If they ask to purchase something discuss with them how much money they will have left, if any. Help them reason on whether they really need the item or do they just want it.