It’s my pleasure to introduce you to Angela today. She’s a busy working mother, wife, and an accountant with a passion for traveling with her family. Five years ago they re-evaluated their lives and goals after the sudden loss of her mother-in-law. They vowed to slow down and to enjoy life with their small children by getting outside and exploring. Angela details these adventures over on her blog, Accounting 4 Chaos, and discusses how simplifying lives and budgeting are key to allowing her family to live the life they currently have.
Tip: Need some help getting your chore charts in order? Grab this FREE template to get you started! Find it HERE.
Simple Ways to Teach Your Children the Value of Money
Teaching your children the value of money can be difficult, but it is one of the most important lessons you can teach them.
So where do you start? Well to me, teaching my children the value of money goes hand in hand with working together as a family unit.
Set Family Goals Together
It is important to set family goals together. We wanted to take our children on an amazing family holiday. We started the discussion with the girls around where they wanted to go, and they each nominated two or three places before voting for their favorites.
Now we had the girls “on board”, but it was important to us that our children learn the value of money. So, we started a conversation with the girls around how we could save money as a family.
The first choice we had to make was whether to keep a cleaner, or whether we do the cleaning ourselves – an obvious way to help save money towards our dream trip. The problem was we were both busy working parents and already time poor. The whole family was going to have to commit to this. With the girls’ agreement, we introduced chores (for all of us), and we saved the extra money toward our dream family holiday. The girls helped, earned pocket money, watched their bank balances grow, and saw the holiday savings increase.
Because we were planning for this trip as a family it also made it easier when the girls wanted things. No, we can’t go to the circus, sorry, but we can see a show when we get to Las Vegas. No, we can’t go out for lunch, but we can go in a helicopter in Vancouver. The girls got fewer presents at Christmas – but they knew they would get to go to Disneyland instead. The girls quickly learned that in order to work towards our goal we all needed to make sacrifices.
By the time we were ready to leave, Miss 13 was telling her school friends she had $300 in her bank account. When her friends exclaimed “your parents gave you $300???” she was able to say proudly, “NO, I worked for it!”.
Pay children an allowance
Experts are split on whether to pay children allowances for completing chores. Some recommend giving children an allowance as a “teaching” tool (rather than as payment for chores), so the child can learn to manage their money. The idea is that it is our responsibility to teach children to manage money, in the same way as it is our responsibility to house, feed, and clothe our children. We don’t expect children to complete chores for their allowance in the same way that we do not charge our children for food and a roof over their heads. Also, if we link the allowance to chores, the child may simply “opt” not to complete the chore, and hence no lesson learned. A time will come when the child simply decides the chore is not worth the payment. Whilst that is a perfectly valid school of thought, it’s going to come down to personal preference.
In our household both my husband and I work – a lot. We have long days and demanding and stressful jobs. Yet we still come home and cook a healthy meal, clean the house, do the grocery shopping, maintain the garden, and make sure there are clean clothes and costumes for the disco. What I’m saying is – we are busy. We are working hard. And we have an expectation that everybody in our household contributes, children included.
We have implemented an allowance system based on chores the girls do. The girls don’t have an option to simply “opt” out and leave hubby and me to sort it out. They must complete the chore regardless. However, if they do a good job, they will receive their allowance. If they fight, have a tantrum, whine, give attitude – they lose out on the allowance.
So what does our allowance system look like?
There are a few critical points to make this work:
Age Appropriate Jobs Are Key
In our house chores started at around five years old. The girls are paid an allowance, or pocket money, based on their age. They receive 50 cents per year of age. In return, they are given age-appropriate chores to complete each week. For example, our once five-year-old was paid a $2.50 per week allowance, and in return, she had to set the table. When she turned six, she was paid $3.00 and started doing the dusting; she even had her very own ladybug duster she proudly went around the house dusting with. At eight, we added “clean two kitchen drawers”. Miss 13, at 12, needed to empty the dishwasher every day and then either vacuum the floors or clean the bathrooms on the weekend (her choice). At 13, we added bringing the washing in off the line.
Chores Need to be Agreed Ahead Of Time
I have to be careful not to add extra chores each week. If there are extra chores that need doing the girls have the option of doing these for extra pay.
Parents need to remember to pay the allowance
A chore chart can be a great visual reminder of the chores the children need to do and can serve as a reminder of how much one owes one’s child.
However, it hasn’t really worked for us (i.e. me, I forget to tick chores off and never had the cash to pay them). We ended up losing track of what they had earned, and the girls lost motivation when they couldn’t see their money adding up.
I have now opened a bank account for each of the girls and I’ve started automatic payments for their allowances. We can check their balances for them when they want to know how much they have saved or if they want to spend their money.
Align expectations.
Children are not going to have the same level of perfectionism that we have. Although I do expect my children to make a concerted effort, I cannot expect perfection from an eight-year-old (unfortunately).
Be consistent.
It can be SO easy to give in. We know we can complete the chore better and in far less time, and when you throw in tantrums, screaming and whining (usually by the child), it can be tempting just to do the chore yourself.
Persevere. With consistency, you can get your kids into a routine. Keep in mind the long-term benefits.
Talk about money
Take everyday opportunities to talk to your children about money. Give them the cash to buy the milk. Count the number of ice blocks you can buy with a $5 note. Teach them to look at prices in the grocery store – what is the comparable price per roll of toilet paper? What is the comparable price per 100g of sugar?
Including your children, particularly older ones, in family discussions about money helps teach them about the value of money, and that, as adults, they will need to make choices.
One example is planning a family vacation. Miss 13 has taken a keen interest in planning our next family vacation. We have set her up with an Excel spreadsheet and a “budget”. She has $30,000 for a five-week trip for a family of four. From this, she needs to take $5,000 off for airfares and save another $5,000 for food and spending money. This means she has $20,000 for all accommodations, car hire, entertainment, etc. Miss 13 promptly found amazing Whitsunday adventures and five class accommodations at $3,500 a night. As you can guess, she quickly learned her budget wasn’t quite going to extend as far as she wanted.
Whilst teenagers should participate in family financial discussions, they don’t need to know every detail, such as our income, or the size of our mortgage. But my 13-year-old daughter should have a high-level understanding of the pressures on our family budget.
Children should contribute
Miss 13 is very outdoorsy, independent and driven and she has the travel bug. Whenever there is an opportunity for a trip – she wants in. There was the Girl Guide Jamboree – a week away in Christchurch (cost approximately $1,000), and most recently, a school trip to Wellington.
All amazing opportunities.
All expensive.
And we want to give her all these experiences.
But it is also important to teach her the value of money, that she can’t simply sign up for every exciting new adventure and expect the money to turn up accordingly. So, for each of these trips, she has also had to save up at least $100 of her own money. This is usually a combination of pocket money, birthday money (from relatives), and extra jobs (washing cars, folding washing, etc.).
By saving and contributing, Miss 13 learned how to save up, and wait, for something she really wanted.
Be willing to Say NO
As you’ve seen, Miss 13 has a penchant for expensive trips. The latest one on the list was a school trip to Japan.
For two weeks.
Without us.
Cost approximately $3,500.
It was a tough decision – it is an amazing opportunity, but do I really feel comfortable sending her to another country on her own? It is a lot of money for one member of the family to travel when she has had plenty of other opportunities to do so. And there is her sister, who hasn’t had Girl Guide trips to Christchurch and school trips to Wellington.
Ultimately, we said NO and Miss 13 learned money doesn’t grow on trees.
Tip: Need some help getting your chore charts in order? Grab this FREE template to get you started! Find it HERE.
