At some point in your child’s life they grow up and begin their career. That might be as an accountant, garbage collector, manager at a fast food company, doctor, attorney, or any number of other choices they have in life.
We all have dreams and hopes for our children and most of the time that includes their ability to care for themselves and their family.
One of the best ways we can prepare them is to teach them how to make, manage, spend and invest money while they’re still living at home.
When my now 19-year-old young man was 10 he decided he wanted to make money, but he wasn’t sure how. So we spent several hours investigating and researching ideas that would work.
After we were finished we had a list of over 30 ideas he could do on his own or with minimal help from his mom. It was important to him that he did things independently and I wanted to honor that for him.
He picked a few from the list and carried them through, changing occasionally as life circumstances changed. This money paid for clothing he wanted (and didn’t NEED), special shoes, tickets to events he wanted to attend and started padding a savings account that rivaled his older brother’s.
He learned the value of money – how much it took to make it, what he could do with it, how to save it, what was worth spending it on and how to develop a plan for his future.
In the meantime, he and I started to write a book that listed those ideas, how to prepare for them and how to market them. He tested the ideas he enjoyed and shared how he felt about them.
He wanted to write a book with me, but somewhere around age 12 he decided that he was no longer interested. So, mom moved forward on the project on her own – slowly but surely!
The children have never gotten an allowance, so they had to turn to making money outside the home to have spending money. Sometimes this was more difficult for me than if I gave them an allowance for keeping up on their chores. But, for me, it worked.
For other families it might work to use an allowance instead, although there are several ways your child can make money from home or in the neighborhood that are safe.
Here are several of the ways we all worked together to ensure that my children learned strategies that would work for their own lives.
- Create an open environment where you discuss money matters with your children. You may or may not want to share your financial situation with your children. However, whether you share part or all, it’s important that your children are able to ask questions and get honest answers. This is where they learn about money . . . at home.
- Talk about how they should receive – money, gifts, time from others. Although not specifically about money, the ability to receive a gift with grace will go a long way to helping them graciously receive more and more money. No one enjoys giving a gift to someone who doesn’t receive well or who refuses out of a misguided sense of being humble. If you can’t receive well, you may not develop into a very good giver.
Life is about two sides. You give or receive. Yes or no. East or west. Up or down. When you learn both – giving and receiving – you’re just happier.
- Define for yourself what your family values are about money and spending. If you don’t think you can verbalize the values you already hold, ask your children! They are experts at watching what you do and not necessarily what you say. They’ll be able to tell you about your money habits.
If these aren’t the habits you want for your family, then it’s time to identify the ones you do want, and incorporate them into what you DO and what you SAY.
- It’s important to structure times where your children learn about money. That might be through helping them to develop their own micro-business, learning how to invest their allowance, helping you develop a budget or any other number of function things you can do around money.
- How will you deal with your children’s differences? Your children are all different and they are different from you! They will have different ideas about money, jobs, careers, politics, friends and everything else in life. How will you deal with that? Determine it before the differences become rifts between your children or between you and your children.
- Talking about money today must also include a conversation about advertising. The basis of all advertising and marketing is to convince you, the reader or listener, to BUY, BUY, BUY. Do you need it? Do you want it? Is it necessary? One fun way or talking about marketing is to sit with your children and watch an info-mercial or two. These are some of the best examples of marketing in motion.
Info-mercial companies must pay a LOT of money for their time on television and so their marketing has been fine-tuned to get the highest conversion – or number of people who buy based on the number watching.
Be prepared NOT TO BUY. Instead, talk with your children about what the advertisers are doing to convince you that this product is necessary in your life. It’s an incredible education for both you and your children!
- Communication is key. It’s important, like in any other topic in their young lives that you guide and discuss. DO NOT force, dictate or direct. You don’t take well to people who force you – they don’t either. This includes encouraging and praising them without criticizing.
- Children need the time to make mistakes under your roof. The time to make money mistakes is when they are making 20 and 30 dollar mistakes – and not 200 and 300 dollar mistakes or even worse, 2,000 and 3,000 dollar mistakes.
- Explain to your children what you can and cannot do with the money you have for the family. When they know the limits, they can help you make decisions you can all live with. If your entertainment budget won’t handle both going to the movies and dinner during the week, they can help make a decision with you. Maybe dinner and movie this week and nothing for the next two weeks . . .
- Have an expectation that your children do their chores without payment. They aren’t going to be paid to keep their own home clean when they grow up and move out, so it’s probably a great idea that they aren’t paid to help keep their current home clean. Allowance, by definition is something you give them ‘just because.’