Learning how to manage money at any age can be challenging… if you make it. Money management is actually rather basic, using just common sense and following some simple guidelines.
But, if you are never taught or told these basic principles, you may never get a grip on it and your money will always end up managing you.
Some money basics include living within your means, saving and eliminating debt. As I’ve learned from Dave Ramsey, you should also give generously.
Teaching your kids how to handle money is your responsibility, not the schools.
Maybe, someday schools will include this in the curriculum. For now, the responsibility relies solely on you.
Taking these principles and passing them down to your kids can be done creatively and effectively. It can be fun and educational if you set up the rules ahead of time and remain consistent.
Paying a commission to your kid(s) for completing jobs around the house is a great step in teaching them about money. You can decide as a family which tasks will earn a commission (the pay should equal $1 per task completed – non-negotiable). Keep it simple.
Save… Spend… Give…
Choose three designations for saving, spending and giving. For example, we use a large, clear jar for saving, an envelope for spending and a small purse the girls bring to church for giving.
If your kids are young, use a clear container to save the dollar bills in (visual reinforcement is powerful). As they get older, open a checking account and teach them how to run it by having monthly reviews together.
This little amount of training early on will be powerful.
- They will learn if they work, they get paid; if they don’t work, they won’t get paid.
- It will teach them how to live debt free. If their spending envelope is empty, they are unable to purchase anything.
- Teaching a child the act of kindness and giving at an early age is a blessing and a great lesson.
This easily implemented commission plan can save your children loads of stress as they become adults. It will reinforce the importance of living within their means, the importance of saving and giving… a life long lesson they will thank you for.
Do you use a commission system? Please share your tips and tricks …and experiences in general!