We have tried to prepare our daughters for the real world in terms of finances and here are some of the strategies we have employed.
- Pay your child for work done. This helps them prepare for the time when they will be in the work force. We pay each child an allowance but it has to be earned by completing their chore list. We set age appropriate chores and realistic expectations. For example each child has to maintain a clean room. Additional chores such as walking and brushing the dog, emptying the garbage and laundry, etc. are divided up according to skill/age. Chores are to be completed by 10 am on Saturday morning and then allowances are paid. Chores not done? Sorry, no pay check. Gee, just like a real job. Additional or seasonal items are paid by the job (cleaning the basement, picking up sticks on the property, etc.)
- Help them to tithe or give charitably. We require our children to give 10% of their allowance to their church just like the adults. They have their own giving envelopes and perform this ritual weekly. It's just a good habit.
- Each child has their own saving account established at about age 2 or 3 and are required to save 50% of any money earned over and above their allowance (job such as caring for the neighbors cat or babysitting OR in the event they get a REAL job they are use to paying themselves FIRST!) As their expenses increase their percentage of this drops to 10% so they can afford to pay their bills.
- and YES! They do have bills. Allowing them to purchasing clothing over and beyond their clothing allowance (my oldest daughter wants a COACH purse) or their car insurance, eating out, manicures, etc and a portion of prom expenses helps them build healthy boundaries and is a great dose of financial reality. Before we set up this system we were constantly nagged by the whine of "BUY ME THIS..." Now they know they can have it--eventually.
- Set up a checking account before they are in high school. We deposit their clothing allowance and school fees into their checking accounts. They have to spend wisely, write checks and balance the checkbook. It is amazing how a shirt from TARGET suffices when they are spending their OWN money when before only a HOLLISTER shirt would do.
- Additional allowance tips: I include enough money to pay for SOME of their social activities. This way they have to decide what to spend their money on. Our 10 year old earns $5 per week and the 16 year old earns $15.
- Talk openly with your children about finances. Review the insurance bill, the grocery bill and the electric bill with them as appropriate Having an understanding that these items don't come cheap is invaluable as a young adult.
- Have them read Dave Ramsey (and write a book report). We plan on paying $50 when this task is completed and feel it is a wise investment in their financial future.
We have been pleased to see both our daughters grow and mature in fiscal responsibility. They are generous kids who know how to delay gratification, budget for future purchases, save their money and shop wisely. We pray that they will be self sufficient adults who are able to build a secure future by living frugally (but well) each and every day!
By Diana from Prospect, KY
