Teaching our kids about money

My local MDC tribe started up a thread to discuss financial issues: budgeting, tracking spending, paying down debt, life insurance, etc.. I’m actively participating because I finally feel like DH and I have gotten a handle on our finances. It’s so rewarding to look back on the difficult years we’ve faced as a couple, not so long ago, and see how far we’ve come.

I find myself dispensing alot of advice or BTDT’s on our thread. It feels good to be able to pass down the wisdom I have gained (largely from making all the classic financial mistakes myself!). Hopefully I don’t come across as a know-it-all.

But it makes me think, why did I have to go through it all (and in some cases, more than once) to finally figure out how to properly manage money? My mother was frugal, worked hard, and good with managing her money – she’s sitting pretty in retirement: bought her condo with cash, and travels regularly, all after years of working at a middle income job. But I heeded none of her good advice when I was younger, and looking back I just don’t know why. I don’t think i really, truly, understood what she was saying. Maybe the truth is that we have to experience these things to really “get” them. And so I’m thinking of what I can do to help my kids learn how to manage money, the perils of debt, how to save, etc. A few simple things like avoiding debt and saving from the beginning can have them sitting pretty when they come into their own, but how to teach them that?

I have misgivings about the concept of an allowance. I question the value of a contrived income when the children’s needs are taken care of – all they’ll spend it on is stuff I wouldn’t buy them and I don’t know how the concept of credit would work its way in there, though the notion of saving might. I am ethically opposed to paying kids to do chores, or otherwise participate in the realities of family life. My kids are still too young to talk finances in a meaningful way, but in the meantime I’ll be considering the matter and looking for good ideas…

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2 thoughts on “Teaching our kids about money

  1. Space Mom

    AH- Alas, I have to disagree with you there, MLT.Our kids are the same ages (roughly).We give S $1 in quarters a week and L gets $0.50. First, we donate 1 quarter from S’s to tzdakah. This is charity and we donate 1/4 of her money. We match what ever she donates. Then we save the rest. So far, she has been looking through catalogues. She has been able tor ead the prices and suddenly there is a connection.”I get $1 a week and to get Dora, I would need to wait 24 weeks. Mommy? How long is 24 weeks?” And the value of money hits her.We have been teaching finances since they could talk. We disuss how just because you have money you don’t need to spend it. We discuss donations and how does the money get into that money wall at the bank anyway (Mommy and daddy work and we trade our work for money) We also discuss how all financial transactions are trades. We trade XX dollars for an item. They understand trading.I personally feel that kids need to have the experience of money from an early age. They need to understand that if they are going to buy something that I don’t want to buy them, just how much these things cost. And what cost means.So far, we’ve been pretty good at explaining these things.Credit? That is for when they are a little older. We’ve explained some basic credit rules (for example, we use EZ-Pass, an electronic toll system and we’ve explained how that works).Money and finances are so important… I think we need to make it just as important as nutrition to kids.

  2. Shelly

    Have you read anything by Dave Ramsey? I love his books. His system has helped us to pay off over 15,000.00 in debt since March and save for a down payment on a house. He’s a little radical and his work definitly has a Christian slant, but we love him. He also has a great program for teaching kids about money, it’s called Financial Peace Jr. We just got a copy last week and haven’t used it yet, but once we do, I’ll let you know how it works out.p.s: In my house, we don’t do allowance. We do commissions. If they work, they get a money amount that equals their effort. If they choose not to work, then they don’t get any money.

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