Money, Money, Money: Part 3

We've been doing Dave Ramsey's Financial Peace University in my small group and the assignment for the past week was to take steps in teaching our kids about money.  Since I have already started this concept with my kids (here are the links to my 1st Money Post and my 2nd Money Post), I thought this would be a good time to fine tune.

The big weekly/biweekly chore has been going really well.  That's where the kids earn the bulk of their money.  In January, they helped pull weeds one weekend and wash the cars on another weekend.  When we do this weekly/biweekly chore time, we have the kids divide their money into their "spending," "saving," and "giving" containers.  (We typically do 20% Savings, 20% Giving, 60% Spending.)

Isaac has learned a lot since the first trip to the store with his first dollar.  He now has a goal to save even his "spending" money in order to buy a $10 Lego set and is highly motivated to work hard and save for it, rather than wasting his money on a junkie toy that he will likely lose a few days after he buys it.  I have learned that Abby, being younger, needs more immediate gratification to motivate her work.  She will work with the prospect of an immediate trip to the store for a candy purchase.

 So, after the car washing, we went to the grocery store and the kids brought along their wallets.  They lucked out and found gingerbread house kits marked down from $11 to just $1.  They each bought one.  Isaac, who had $8 at that point toward his $10 Legos, said, "I still have $7 and I'll earn more."  And I know he will.

They had a great time decorating.

Abby was fast and indiscriminating about it, eating almost as much as she decorated.

Isaac was uber-precise, pre-planning every step of the way.  He took so long I finally had to tell him we were out of time for decorating!

One change I decided to make was to the chore chart I had created earlier.  I added new chores, took off some old ones, and increased the pay on some (no more penny wages).  This chore chart is for the kids to do as needed.  These are things I do daily or weekly and if the kids want to earn more money, they can opt to do it for me to get paid.  They are pretty motivated by it and I let them choose whether the coins they earn go into their "savings," "earnings," or "spending" containers.  (They usually choose "spending!").

We have decided that all of their "savings" will be saved from now until they are old enough to purchase their own car.  I know that sounds incredible since they are only 3 and 5, but as their abilities increase with age, the chores will become more complex and the commissions for their chores will increase with it.  And think of the payoff 10+ years from now when they are able to buy their own car with their own savings!

Finally, although we started a "giving" container for their commissions, we have yet to actually take it to the church to "give" it!  We really should be reinforcing this behavior by doing this on a monthly basis.  So, we finally remembered to bring in their coin purses this Sunday to church.  We talked about how we give to the church to let God know that we know our blessings come from Him and so that we do not become too selfish and want to keep it all for ourselves.

Obviously, with such a big concept as money, this lesson will be a continuous work in progress, but so far, they are learning good life lessons at a young age.

Money, Money, Money: Part 2

Adel and I have been attending Dave Ramsey's Financial Peace University this past month.  We really liked one of the ideas he has for teaching kids to be responsible with money.  For any money that the kids receive or earn, Ramsey recommends dividing it into three separate envelopes or containers: Spending, Saving, and, Giving.*

I liked this because I feel like we've done a good job teaching the kids about saving, but not about spending or giving.  Up until now, if they gave, it was our money, not their own, and when they received money, it tended to go straight into savings and nowhere else.  While saving is good, on its own it doesn't teach them the value of money or how to handle it.

After the last chore chart I made (in the first "Money, Money, Money" post), I realized that I am not up for checking daily chore assignments.

We still keep the chart so the kids can opt to earn extra money here and there, but this time we aimed to try for one larger, weekly chore for the kids to do to earn their money (supervised for now, but training them to one day work independently).  For now we're going to try having the kids help out with whatever Adel and I are working on in a particular week.  For example, this weekend we did yard work.  We had the kids do 30 minutes of weeding to earn their pay.  

Isaac was actually genuinely helpful while Abby needed a lot more directing: "Over here, Abby.  Here's a weed.  Stop playing around Abby.  Come get this weed.  Right here.  It's right here.  I've been trying to show you for the past five minutes.  Come pull this weed.  Good girl!"  Needless to say, I chose to pay Isaac a bit more than his sister.  Next weekend we may wash the car and get them to help.  And so on.

Once they were done with the work, we introduced the three containers and showed them how we wanted to divide up their pay.

Later in the week, when they were along with me on a shopping trip, we brought their spending money so the kids could put our plan in action.  The shock of value was a good lesson for them.  Here they are looking at big toys they could not afford to buy with their first pay check:

While I encouraged them to save up their Spending money for bigger purchases, the allure of the power to buy was too strong for them and they lowered their expectations to items of more appropriate value for their budget (no surprise, Abby got candy!).

And we'll work to make it a habit to bring their Giving money at church on a monthly basis.


*Side Note: Ramsey advocates paying kids for chores as long as they have the understanding that there are other things we do for our family just because we're part of the family (ie: you don't have to pay them for everything they do to help out!)


**Update from Oct 17:  The following weekend, the kids helped us wash the car, inside and out.

Isaac was again genuinely helpful, but for some reason I have no pictures of Abby actually working.

But isn't she cute?  

Isaac got paid more than double her earnings this time!  And this time, he decided to save it up for something he really wanted, rather than waste it on a cheap toy.  They're learning!

Money, Money, Money!

Our theme for this week was...you guessed it...money.  We started by finding some library books.  One Cent, Two Cents, Old Cent, New Cent is a good introduction to money (history of, how it's made...).  Like many informative books, it is a little over Isaac's head, so I reserve the right to pick and choose which sections I read.

Money Madness by David Adler does a good job of explaining how money is used.

Then we made a quick game of memory by sticking pairs of coin stickers on note cards.  You could easily do the same by just taping real coins on note cards.

Playing memory with coins was actually Abby's idea and turned out to be a good way to help them practice saying the names of each coin and matching same-type coins together.

Then we got entrepreneurial and set up our own Lemonade stand.  Isaac colored in the sign and helped mix the sugar into the fresh-squeezed lemonade.

  Abby and Isaac enjoy an ice pop on the house while waiting for our first customers.

Customers!  Thanks to the friends who came out to support my kids' first attempt at business!

We did a lot of other small activities with money this week but honestly I think the most valuable for Isaac was sitting there playing with the coins while he waited for customers.  We played little games while we waited: How many pennies are in a quarter?  Find all the dimes. Put the coins in order from lowest to highest worth.  Which one is worth five pennies?

I ended up making a chart using those coin stickers to help the kids remember how much each coin is worth.  For now, we stopped at a dollar, because it's going to be a while before they need to know the bigger bills.  That's for the next lesson!

Finally, I have been inspired by this week's theme as well as by a few of my friends who are teaching their young children to value of money by earning it themselves.  So I created a chore chart where the kids can see how much they will be paid for each chore they do.

Adel said, "You're only giving them a penny for feeding the dog?"  Well, I figured since they fight over who gets to do this one anyway, I'd set the price low. (Something had to be worth a penny, right? Just so I could use all the different coins for educational purposes!)

The kids were actually really excited about starting their chores (which is good, because I plan to spend tomorrow cleaning the house!).  In the meantime, these two hard workers deserved a break: