photo credit: Little Miss Eclectic Photography
It’s important to teach kids about money. The way we learn to save, spend, and handle money as a child can play an important role in the way we manage our finances as adults. Let’s face it, in the world today more value is placed on stuff than ever before. It seems more and more that people lack the responsibility and discipline to save money before making big purchases. Instead we are jumping on the debt train and racking up the bills. If we don’t teach our children about how to manage their money, who will?
photo credit: Little Miss Eclectic Photography
Allowance
Handing an allowance to your kids every week (while a perfectly valid way to get money into their hands) could instill an attitude of entitlement over time. Receiving money for nothing doesn’t translate into real life very well. As adults, we know very well that we have to work to earn money and allowance could be teaching just the opposite. Instead of making allowances for our children, we could be taking an opportunity to demonstrate the relationship between discipline, hard work, and rewards.
Commission
If you can’t give your kids an allowance then how will they earn money to learn how to manage it? Commission. What is commission? Well, just like a sales person who earns an income based on sales, a child who earns commission will earn money based on involvement. Yep, we’re talking about chores! The idea is that certain chores are assigned value. The child who does those chores can get “paid” for them on a weekly basis. This translates to “real life” much more realistically than the idea that you get handed an allowance every week simply for existing. Commission teaches kids that they have to work for what they get. Assigning greater value to harder chores will also teach them that the harder you work the more you are able to earn. When kids have the power to determine how much money they earn on a weekly basis they can better learn how to plan for the future. They are able to set goals, maybe they want to buy a specific movie or toy, and they can directly see how their effort is turned into the item they want.
photo credit: Little Miss Eclectic Photography
Respect
When kids are turning their hard earned money into toys and items that may be special to them they might have a greater respect for those items. They know not only the financial value of the object but the physical value as well. Kids will remember how many windows they cleaned and how many dishes they washed to earn their special object.
Now, all this said, there should always be some household chores that kids are expected to do simply because they are part of a family unit. These might differ between households but some examples could be things like keeping bedrooms cleaned, clearing the table after meals, picking up shared areas in the house etc… Whereas, commissioned chores might be things that are a little extra work. Maybe these are chores that mom or dad might normally do. For example, they could cook a family meal, help organize the pantry, rake the yard, or even sweep the garage. Try to remember that money IS a tool. It can either teach a child that things should be given to them or that they need to be earned.
