Kids and Money

8 year old money management

There has been a lot of talk in the media about many specific areas of parenting lately.  I think possibly the two most popular areas of talk center around child obesity and raising a financially savvy child.  In our home we have always striven to eat healthy and exercise, but only this year did we implement the next step of raising financially literate kiddos.

Here is how we set it up to work in our home ~

We started with two main thoughts:

• Kids cannot learn to manage money without having some & some guidance about what to do with it.
• Regular chores / jobs will not be paid for (they are part of being a family member), but everyone gets a set amount each week and has the opportunity to earn more if they would like to.  (for more about set jobs see my earlier post - http://parentinginlittlefalls.blogspot.com/2012/04/managing-small-home-and-large-family.html)

After we had our purpose set, we set the wheels in motion - each kid got a "bank" - for our family we chose to do wooden boxes from the craft store and have each kid paint their own (see above photo).  Then each kid received three envelopes - one for money to give, one for money to spend, and one for money to save for bigger items.  There are so many great ideas out there on how to design kid friendly banks - check out Pinterest for more inspiration!

Here is specifically how this worked out this past year for my now 8 year old -

Nintendo 3DS savings envelope

First he created his three envelopes - money to give, money to spend, and he chose to begin saving up for a Nintendo 3DS.  He set his goal and made check boxes to record his progress each week.

Every Friday night (or Saturday depending on the week) (or sometimes it takes an extra week - I just hang on to our sheets for any unpaid weeks and keep them until the next time we do "payouts") is our family night -

Our Weekly To - Do Chart

Each child, including the 8 year old, has opportunity to earn more money by doing more jobs -

Our 8 Year Old, 6 Year Old, 4 Year Old, and 2 Year Old's allowances.
The top part shows how much they get every week and the bottom are the optional jobs & money.

At the end of each week we sit down as a family and look at how much each child gets for their bank and help them think through which envelope to put it in.  It was so fascinating to watch my 8 Year Old process whether to "spend" his money right away or keep on saving up for the Nintendo 3DS.

After many months of saving and a big help from birthday money, he had quite a bit saved up.  Now he did his research...he found that he could indeed buy the Nintendo 3DS, but would be unable to afford any games right away.  He thought about that while we looked at the other options and ended up being the happy owner of a Nintendo DSi and two games!

Proud Nintendo DSi owner!

I am very proud of him for sticking with his large goal.  Our 6 year old set a goal of saving up for a puppy from the local toy store and met it, and our 4 year old has been able to buy some smaller things and has had to pay for some things he has destroyed, he is still working towards his larger goal of a Captain America shield.  Overall, we have liked the blend of intentionally giving them money with the express purpose being to learn how to manage money and also giving them the chance to earn more.

There are many different parenting philosophies about money and how to teach kids about it, this is simply ours for now.  Yours may look very different and that is okay too!

Who taught you about Money?  What do you wish you had learned earlier?

How are you teaching your children healthy money habits now?  Why do they matter?