What Methods Do You Use to Teach Your Child the Value of Money?

My son is almost 5 and I've been teaching him about money for about six months now. Not sure about the allowance thing just yet. I have tried something though...my son has a piggy bank with money that he's been saving up since he was 3. Every day he's been good, I put my daily change in it. There was this one time when we went to the store and he kept playing with these jars of pickles on the shelf. I told him no and he "knocked" it off the shelf anyway. I ended up having to pay for the broken jar. Soooooo, when we got home, I took a butter knife and started going through his piggy bank. He protested and pleaded. I explained to him that it wasn't I who broke the jar...so why should I have to pay for it? I explained to him that we pay for the things that we use, break...etc. Also, near his 5th bday, we are going to do something different with the money he saves. We are going to have three jars, one for saving,one for spending, and one for donation. Teaches them to give, save, and have a little for themselves. :D

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In our family, at age 6, when she asked for it, my first daughter received one dollar for each year of age per week. I know it sounds like alot, but she got to put it into 4 "pots" divided evenly: one for immediate spending (if she wanted to), one for longer term saving that she couldn't spend for at least one month (to encourage delaying gratification), one for philanthropy (after a year, she donated it to Tears of Joy Puppet Theater), one for her college fund. We increased it 1 dollar per week per year till both my daughters starting earning babysitting money which they continued to save in similar ways. One thing it eliminated was constantly asking me to buy things for them. They learned that they had their own resources for short term and long term purchases. They both have become hard workers, have part time jobs now, (they're 17 & 20) and are both pretty good with money, earning and saving, so I'm happy with the early thought we gave to this.

S.
nwmidwives.com

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We give our 7 year old daughter $2 a week. Doesn't sound like much but what does she really need the money for anyway? We always give it to her in quarters then we have a system where 2 quarters go to charity, 2 quarters go into her "savings" piggy bank and then she gets the last 4 quarters for her "spending" piggy bank. We have no restrictions on how the "spending" piggy bank money is spent.

Also, she does have assigned chores (set the table, put away own toys) but these chores are not tied to allowance. We are trying to teach her that, in a family, everybody does their part and that you need to help for everything to run smoothly - not for money.

Interesting question - I look forward to seeing the other responses.

L.

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Hi J.! My name is R. and my hubby and I have 2 wonderful children, ages 4 & 6. We recently started paying our children commission, not allowance. We give them jobs such as; feed the pets, help fold laundry, put laundry away, help put dishes away, etc.. They do the work, they get paid, they don't do work, they don't get paid. Also once they get paid they have 3 envelops, they must put 10% into the "Giving" envelope, and then they can decide how much to put in the other 2; "Saving" and "Spending", but they must put some in all 3. Whatever they chose to put into "Saving", mommy and daddy will match. Hope that helps some. Good Luck!!! I think it is so important to teach children while they are still young the importance of money and the value in giving and saving. Have a Great Day!!!

~R.~
www.MomsOfferingMore.com

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Our daughters are 8 and 10. A few of years ago we started giving them allowance. It's a given. They don't earn it. Chores are a given but I read that you shouldn't pay your children to do their part in the household. So far so good.
So every two weeks they get $2.00 and $3.00. (It has gone up only a tiny bit.) When they would ask for candy or a rubber dinosaur, a new headband, etc., I would say, "Yes, but you have to use your own money. Do you have enough?" They had to really think about if it was worth parting with their money? I now hear them discussing the price of an item and the value. They even put something back with the intent of saving for that bigger ticket item on their wish list. It's been worth it.

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Hello, first of all I think 4 yrs old is a little young however good for you if she is understanding so early. this is what we did to teach our children. Start her out on chores around the house and try to make them fun. then when you go out shoping take her with you and point out things that are too expensive too cheap and what is just not nessary. It may seem like a lot of trouble but she will catch on. Even the jobs around the house are important and reward her and give her raises. and show her that her raise will pay for something she wants. Of course it always helps if you know what she wants to buy and show her how she can get with working for it. Showing a child what the money they have in their hand is worth or can buy is very important. I hope this will help. Good luck to you F.

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Hi, J.! I wanted to let you know that we have a 7 year-old, 2 year-old, and 6 month-old. My oldest does chores every day when he gets home from school (waters plants, unloads dishwasher, etc.), and he helps his dad outside in the evening. We pay him a $2 allowance weekly, and he earns additional money from his dad for larger chores outside. Both of my children help me with my Mary Kay business in many ways, and they earn some money every time they help, or when I come home from doing a fun appointment. (It makes it so much easier on them when I have to leave the house! They know it is for all our benefit!) My 2 year-old daughter is happy with her coins she earns for picking up her toys! They both have piggy banks that are from Thrivent Lutheran that are labled with "saving", "donate", "invest", and "spend". My son's bank is overflowing in the invest and save categories, so we gave him an additional large water jug to put his money in. Periodically, we go to the bank and deposit his money. We talk a lot about what he will eventually spend his money on. Currently he is talking about a house, car, or college! It's fun to talk with him and help him plan! Otherwise, he takes his money to buy birthday gifts for his friends, and other items he feels are necessary. We talk a lot about what money does for us; both the necessities in life, and the fun things we get to do. He has learned from an early age as he helps me with business aspects of my Mary Kay career. He knows when money I have earned helps us to have a fun time or buy us something that we really need. We enjoy our fun time, and our "work" time together this way!

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I really like Dave Ramseys philosophy on money. He has a childrens edition as well. We also have a very interested four year old and I have not had time to go through the booklet we just got but was told that it would be easy enough to adapt the ideas for any level. He also does a 3 tier save spend tithe system. The idea of chores being expected and not tied to allowance is how we are going as well. Howeer if she does an extra good job on something or does something extra big we do give her a bit of money for her piggy bank.

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I've been thinking about doing the same thing as my dd is about to turn 4.

I know someone that had three jars, one for short term savings, one for long term savings, one for tithes.

I've also heard of starting the week with an amount in a jar with quarters and when a child misbehaves you take a quarter out into the empty jar, it can be earned back as well. (not sure if this works, only heard about it).

My thoughts on parenting are that we are preparing them for adulthood. So, since we work, and get paid as adults, I plan to begin giving her some chores and then giving her money for it when she finishes them. I am hoping to teach her that if she works hard she will be rewarded.

I'm going to check back tho for some great advice on this one too! thanks for posting, good question!

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J.,

We copied some freinds -- at first the kids get $3 -- $1 for church, $1 to "Taxes" and $1 to save up for things that they want. With the "taxes" we do fun family things once a month or so...My daughter is now 9 she gets $5 - $1 for taxes $1 for church $1 to save (savings account) and $2 for her "fun stuff" - she often offers to buy herslf a treat at the movies or a friend's bday gift -- it's cool!

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My 5 year old has a little case which he calls his "money bank". He collects all the coins he finds around the house. When somebody asks him - What will you be when you grow up? - he answers: A money boy! :) I think its good for him to have his own "money bank", it develops his sense over handling money and the value of it.

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I was given some great advice. Pay for some items with cash (not ATM or bank card) that way they can see the transaction, instead of going to the "money tree (ATM)" and getting the money. Also, get them a piggy bank with a see through tummy so they can see their money grow.

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Though four seems a bit young, I used edhelper.com worksheets that have the life size coin pictures to teach the difference in the coins. Be warned once you start, you may end up with coinds all over the house, and constant questions anytime a coin appears! lol

I love childrens quest for knowledge!

37 old mom of seven
jem-

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My granddaughter is almost 7 and we started giving her an allowance for chores when she could do just about anything to help. Sort socks, put tupperware away, feed the animals. There was a lot of praise to go with the money which was usually a quarter and we gauged if that included a couple little jobs or one big one. When she wanted to spend money we showed her how much she would need - say for a game at the mall -- and what she would have left. When she wants new school clothes, we explain you can have this expensive one or get the one on sale and have two. They catch on very quickly.

She has been very receptive and as she has gotten older the jobs of course increased and so has her allowance. She has a savings account and right now she is adding to her vacation fund. She is quite an entrepeneur (sp?) and is always thinking of ways to make money, saves her money but also buys gifts with her money for holidays. I am quite proud of how this has transpired and I try to think of new projects to help her expand her savings. She has a flower garden in the summer so she set up a flower stand. This summer we are planning a food stand with cookies, slushies, etc. I suggested she set it up on the corner where they will be building a new house. Help them be creative.

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