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Sunday, July 6, 2008

Teaching Your Children Finances


Finances, economy, money, we have all heard these words and either respect them or fear them. Money is something that will always effect everyone.... whether we like it or not. I wouldn't like to think that my life is dependent on money or that my life revolves around it, my husband and I like to think we don't care about money very much, but when the truth comes down to it, we do. We care about putting food on the table, getting into our first house, paying for our education, and clothing our child. These are all important and necessary things in our lives, so we need to make sure that we understand money. We can't hide from it, not talk about it, or pretend we don't know how to handle it... because in reality, you can't hide from it.
I hope that this isn't coming as a downer, but more as a motivation for us to embrace our education of finance. The more we know, the less likely it is for us to get burned and Curtis and I have tried to remind ourselves of that and we want to pass that information down to our children. It is important that we, as parents, try to educate and inform our kids of money in the real world. How important it is to save, to plan for those rainy days, and that being frivolous now, can really hurt in the future.

A great way to help children understand the importance of money is to help them see the undersant the relationship with physical labor and the value of money. When I wanted my very first bike, my parents informed me that I would have to pay for half, which they said was $10. So I worked hard to earn that money. I pulled weeds, washed windows, and set up lemonade stands. It took a while, but when I had my money I remembered how proud I was of myself, being able to walk into the store and pick out the bike I wanted.

I never forgot that lesson they taught me or the value of that bike. I appreciated it more since I bought it with my money, not my parent's (though they did help). I understood the value and was more careful with it and when the time came that I out grew it, I didn't simply toss it aside, I fixed it up all pretty and sold it so I could have money for a new bike.

Setting a night aside to talk to our kids about how to be better with finances is a great idea. To make sure they understand saving and true value. Even taking them to get a Savings Account started; I know Wells Fargo has some free Savings and Checking accounts and if you are under 18, you only have to have $25 to open a Savings account. Wells Fargo even has free pamphlets, CDs, and DVDs for children to help them understand how to get started.

Banks always have bankers and financial experts that are more than happy to sit down with you and talk about options for you and your children, so don't be afraid of going in and asking questions.... they there to help and want to help.

We need to help teach our children not be fearful of handling money and for them be confident in their knowledge, especially in a time where there are so many people who are getting in over their heads or losing money when it could have been avoided. Money problems leads to stress, health problems, marital problems, and emotional problems if they get out of hand. Because of this, we have decided that when our children are old enough to start asking for material items that will be a good time to start the explanation of money. It is never too early and never too late to educate them.

How do you teach your children how to handle money?
P.S. Family Moment Monday Rules:
1. I am going to start having the Family Moment Mondays up and running by no later than 6 P.M. Alaskan time, so that will be 10 PM Eastern Time and 8 PM Mountain Standard time on the Sunday night before the coming Monday.
2. Only put your link in Mr.Linky if you are participating in Family Moment Monday.
3. Place a link from your post back here (Motherhood For Dummies) so others can participate if they want to.
Thanks and enjoy


  1. I will be the first to admit i'm not the best with money. I do do the one thing my dad told me, pay yourself first as in my deferred comp ie 401K. But what gets me is growing up I had chores and I would get paid for them. I expected the same thing w/ my stepson, and it is no where near happening at our house at least. I don't know if he'll ever learn about earning anything or how to take care of himself when he goes away to college.

  2. That is one thing my parents taught me that I so appreciate. I am doing my best to teach my kids but I think having it as a family night is a great idea!

  3. I am totally a believer in teaching your kids about money. I grew up having to pay for lots of stuff. I got allowance and I babysat. My mom would give us an amount of money for school clothes and once we spent that we were on our own. If I wanted to go to the movies...I paid for it.

    My girls are 5 and 8. They get 2 bucks a week. They have a job chart and an attitude chart. They get docked 25 cents for not doing their jobs or having a bad attitude. They also get 25 cents per any extra job they do. Every two weeks we settle up. They have a tithing bank (10%), savings bank (10-50%), and then they have their spending purse (whatever is left over). Every couple months we go to Build-a-Bear Workshop and they spend their dough. We always help them on the big purchases.

    Normally I would think spending 7 bucks on a pair of shoes for a bear is insane, but when it's their money and they earned it...well I bite my tongue and watch them pay for their treasures with their hard earned cash.

  4. We've never been great with money either. There was never quite enough growing up, and it made me nervous. We try to save now, but there are always too many unexpected things - our health costs have tripled this year, and the cars are aging rapidly and will soon need to be replaced.
    We have discussed though how to teach the kids about money, and how we will try to do it differently from our parents (the Mountain Man remembers having the electricity cut off frequently, not because of lack of money, but because his father just would forget to pay the bill).

  5. Jason and I teach Ethan about saving already at 3. He gets an allowance of $1 a week, 50 cents of which he has to put in his piggy bank and the other 50 cents he can put towards a Matchbox/Hotwheels if that's what he wants. If he wants something more expensive, then he has to save up for several weeks to get it.

    Once his piggy bank gets a certain amount in it (usually $5 - $10), we make a big deal out of taking the money to the bank and putting it in his savings account. He already has almost $300 in there.

    I hope it teaches him to be better with money than I was. It took me a while to learn that if you can't afford it, you shouldn't buy it, etc.

  6. Great post! From an early age on, my parents taught me to be responsible with my money. At around 10 or 11 I had multiple paper routes, at 12 I started babysitting regularly and all my "income" I put in my very own savings account. I felt so grown up. And immediately at 15, when I could get a workers permit, I was eager to get a job.

  7. I think that is an especially important lesson in times like these...

    Our big thing with the kids is that when they ask for things at the store, we tell them, "Sure you can have it. If you have enough money in your pocket." Someone told me long ago that takes the focus of the "mean" parent not buying the object, and puts the focus on the child having, or not having, the correct amount of money. It works; no tantrums! The kids have piggy banks and we give them our spare change and they have occassionally used their own money for small things (packs of gum, $1 store toys, etc), but we have yet to really sit down and do a "real" money talk. I think that's a good idea for the very near future!

  8. I am definitely grateful my parents taught me all they did about money and how to save, plan, etc. I started helping Taylor save and realize the importance of saving about a year ago.

  9. We have some banks here locally that will put $5 for every A on their report card into their savings account.

  10. Your post is right on. I was never really taught about money. My husband and I are ok with it. We need to be saving more and getting out of debt. Teaching kids how to handle money and save it is very important education indeed. Maybe as I teach them I can follow my own advice.

  11. I really need to get on the ball with Elly on this...sometimes to keep her happy and quiet I'll tell her if she is good I'll buy her a toy (under $2 usually)...and I know this is sooooooooooo bad. Last weekend I stood firm and didn't do this and the fit she threw was embarrasing. So thanks for giving me the kick in the pants on this. Your words are true and right! :) XOXO

  12. Im with you i think its very important to teach children the value of money.

  13. Good subject and post! I keep trying tell my husband our 3 year old is old enough to start learning about money and to have an allowance. now, he has no excuse since I have seen others comments to back me up!

  14. Great post...so important to teach our kids how to manage their finances and to work for what they want instead of expecting it to be handed to them.

    As the mom of the Undisputed Cutest and Most Wonderful Boy on the Planet, I will admit I struggle with this a bit, as I do want to hand him the world simply by virtue of his wonderfulness...

    My husband is definitely the "bad cop" in this house when it comes to saying no to toys and such. That works for us, and I am getting better. Especially since the last twenty months have taught me that toddlers are much less interested in the TOY itself, and simply fascinated with the box it came in. I can't tell you how many hundred dollar boxes I purchased before learning this lesson.

    New baby toys anyone? Toys never touched, boxes slightly used...

  15. Thanks for this post! Given the state of our economy, its every parents duty to start teaching their children even at an early age how to manage money and hopefully avoid the mistakes we've made. I feel very fortunate that my family doesn't have to consider food, clothing and shelter as luxury items, but I know how quickly this can change especially if you haven't been taught the skills necessary to prevent it.

  16. My dad taught me how to work. My grandpa taught me how to save. My grandmother taught me that sometimes you get what you pay for. My married life taught me that doing what you love won't sustain you if it doesn't pay diddly squat. Never underestimate the value of a good education, never underestimate the harm debt can do, and if you're young, it's never too early to start a retirement plan.

  17. My husband teaches peopole about finances every day because he believes so strongly about people educating themselves.

  18. I am good with money now. I pay the bills. But when I was young in college I was foolish!

  19. With as many problems as people are having these days this post is one that everyone needs to heed. Starting a savings account for my daughter has been good because any monetary gifts that I received from my shower, birthdays, holidays and just because has gone into this account for her education. I know that someday I will have to help her pay for college and I am worried about how we will do that, so this savings account is a blessing for her and a relief for me and her daddy. Thanks Kim

  20. I totally forgot it was time for Family Moment Monday. Usually i like to do it, but with vacation and all--- I forgot.
    I'm afraid we have not been very good about teaching our kids about money, probably because we haven't been very good with money ourselves. BUT, the good news is we've gotten much better and now we're at least talking to our older kids about financial principles. I have learned a lot from Dave Ramsey.

  21. Great thoughts. My husband and I were just talking about this last night, are children really need to learn about money and the importance of it. I really enjoyed reading this.

  22. Great post and great comments! Our kids don't get pocket-money yet - although my husband and I have discussed that it might be time to implement this with our oldest (6 years old).

    My parents were strict with this and made me put away 50% of all my wage as a teenager working in a supermarket. Although at the time I was most annoyed at them - I was able to invest it in shares about a year later, and then years after that I was able to sell the shares to pay for nearly half of our wedding!

    I'm so grateful now that they saw the value in teaching good money lessons and I am very good with money/budgeting, etc now (even if I do say so myself)....

  23. This is so crucial. I was taught about money, my husband wasn't. we are working on this now.