A while ago I linked to a post that talked about how people are living beyond their means, and how the wealthy are apparently not immune to such things. It really hit home with me, because when I think back to how much money my husband and I have wasted over the years I feel a little piece inside of me die. We have since pulled our finger out and gotten serious about setting ourselves up financially. Budgets, savings goals, cleared debts, some lifestyle changes — all utterly boring adult things that are quite important if we want to sail the seas of good fortune. But what about Liam? How do we stop our four year old from developing the same reckless spending habits that we did? Read on to learn about how we’re trying to create a money savvy kid.
Teaching Kids About Money
Not long after reading Navi’s article, I did a quick Google search for ideas on how to teach children about money. The first thing that popped up was this fantastic post on MoneySmart. Since Liam is only four, some stuff wasn’t really appropriate for him. There was, however, a lot of stuff that is appropriate for him, and as it turns out, it can be all be merged together into something that is pretty fun for a preschooler. Here are some of the major points I took away from that article:
- Show children what $2 or $5 can buy from the supermarket
- Talk to them about the difference between things they need and things they want
- Put money in a clear ‘savings jar’ so they can see as their savings grow
- Set age-appropriate tasks for around the house and pay accordingly
- Draw up a job chart and let your kids tick off the tasks.
Job chart? Of course! Job chart! Brilliant idea!
How Liam’s Job Chart Works
Actually putting together and creating the job chart turned out to be a nice little time killer while he was on school holidays. We sat down together and brainstormed tasks that he thought he would be able to do – simple stuff such as make his bed, put dirty clothes in the laundry, feed the dog, etc – and then we wrote the best ones on a nice big bit of coloured card, which he then decorated.
We cleared some space on the fridge and found some star magnets that would act as ‘markers’: that way we don’t need to make a new job chart every time something is crossed off, we can just remove the markers when it’s time to start again.
Next up we found an old sauce jar, slapped some stickers on it and put it in a nice, prominent position in his bedroom where it was accessible but safe. Every time Liam does a job off his list, he gets a star. Once he reaches three stars, he gets a $1 coin to put in the jar and the markers are reset. Easy!
Note: I use dollar coins to keep it simple while he’s still learning how to add and subtract. The website suggests that for older children, you should mix up the money between notes and coins to help kids get familiar with handling money.
I try not to put pressure onto him to do the jobs, as I want him to learn that you only get out what you put in (Also, there is the potential for Liam to earn $2 a day with his list, and I am a scrooge boss). There’s also that element of keeping it fun, and I’m hoping that the more enjoyable it is, the more likely it is that it will become habit. It seems to be working, too. We have been doing the job chart for a month now, and he has made $13. Some days he completely forgets or chooses not to do a chore when he’s asked, but other days he’s practically begging me for something to do. The fact that he still even remembers about it after a month is a positive sign.
Unintended (But Very Pleasant) Side Effects
Before the job chart, we used to have this issue where whenever we would go down town, Liam would insist at looking at the toys. Thomas the Tank engine was is his vice, and each time we would show him the trains either one of two things would happen. Either we would buy him something because he was so excited, or there would be a meltdown when it was time to go empty handed — even though we had forewarned him that he would not be getting a toy and he had promised not to cause a scene when the time came to leave.
Well, remember how the bullet points above say to show children what $2 or $5 can buy from the supermarket? It turns out that now Liam knows how many of his precious gold coins it will cost for that Thomas the Tank engine play set he’s got his eye on, we don’t have tantrums anymore. Now that he realises that it costs more than he has, he’s happy to leave empty handed.
Financial education turns out to have more perks than just creating a self sufficient kid, it seems. Hooray!
How do you teach your children about money?