Wednesday, January 23, 2008

Money Lessons

We have started discussing when to start the girls on an allowance. We know it's important to teach them good money management. We are teaching them to save money, but not to spend it. When we are shopping we talk about how much things cost. We talk about how Mommy and Daddy work so we can buy things, and they can attend dance lessons, preschool, etc. We know they are getting some basic money management skills, but we don't know if we're ready to leap to an allowance.

I keep going back to this article "5 money lessons for preschoolers." We are trying to instill some better money management techniques than we have. Apparently, we're on the right track. It's a scary track, though. I don't know if we're right or wrong, but I know we'll keep working on it.

We're still debating an allowance, though. I think we're closer to a solution, but not quite ready to implement it today.


Julie K said...

My husband and I started giving our 4-1/2 year old son an allowance when he was 4. He gets $4 per week (and receives it in quarters which makes putting it in his piggy bank sections easier). He has a MoneySavvy Piggy Bank ( ) which has four sections: Spend, Save, Donate and Invest (right now, each section gets the same amount). There are certain things he has to pay for such as the video cart at the grocery store ($1) or the rides at Walmart (50 cents). I also won’t buy anymore trains for his train table (I think we have enough and they can run between $12 and $24 each), but he wants more and more. He’s forgone the video cart for the free ‘car’ cart at the grocery store in order to save faster for his trains. When he picks up something at a store that I won’t buy, I ask him if he wants to spend his money on it or keep saving for his next train. The answer is almost always save for the next train and he returns whatever the item of current desire to the shelf/bin (without whining, I might add). He’s learning the tradeoffs for different things and delayed gratification (since he doesn’t get enough in one or two weeks to buy a train). We also talk about how his donate money is not for spending, but for sharing. When we see donate opportunities (usually when we’re coming out of the grocery store), we talk about the organization/charity and I ask him what he wants to support. He’s given money to kids raising money for baseball equipment and money to the girl scouts for the ‘cookies for soldiers’ program. He’s also given to the Ronald McDonald house (collection boxes at McDs, of course). He doesn’t give money to every opportunity, and I let him make that decision for himself. We’ve also chosen not to tie his allowance to his chores (there are arguments both ways), but will tie earning extra money to extra chores around the house when he’s older (at least that’s the plan for now).

Mississippi Songbird said...

That's a great idea to start them out early.. It can't hurt..
Have a great day!