Teaching Children Responsibility: Money

When Grace was six she wanted a bike. We told her that she'd have to earn the money for it herself, which wasn't going to be easy as most of the good-paying management jobs tend to go to applicants who have completed the first grade. We don't believe in giving our children allowances for the simple reason that no one gives us allowances. The rule is: everyone contributes to our home without the expectation of monetary compensation (as soon as I get a paycheck for making the bed, then the kids can expect one).

We knew it would be tough for her to earn the money herself but she did. Washing the car and other chores that were beyond what she normally would do earned her fifty cents. If she worked hard, didn't complain and had completed all her regular chores she could earn money here and there but it was slow going because really now, having a six year-old wash your car isn't the way to get it clean, they can only reach half-way up the car so the job's only worth about fifty cents. It took almost the whole summer to earn $15, which wasn't nearly enough for a new bike.

We were wondering what to do, we didn't want her to have worked so hard and then be disappointed but then Andrew got a brilliant idea. Garage sales. They shopped the sales until they found a $1o pink girls bike that was perfect--she even had enough left over to buy a basket and horn.

We learned our lesson and have done the same thing with each of the kids. They earn what they can, we take them to garage sales and they get a bike that works. Not a glamorous brand-new bike but a bike that they earned themselves. And when a younger child, such as David, came along and wanted his own bike instead of us giving him Spencer's original bike Spencer was able to sell his bike to David so he could have enough to by a bigger bike for himself. It's capitalism at it's best I tell you.

Once Grace was old enough to babysit for other people I sat down with her and helped her to put together a flier advertising "Grace's House Help Service." She listed all the chores she was qualified to do, listed her hourly rates and as a "one-time introductory special" offered the first session for free. We printed the information on pretty pink paper, I gave her a list of all our acquaintances in the subdivision within bike-riding distance and she spent the afternoon visiting each person and distributing the fliers. By the time she got home she had two phone calls for jobs and it's been non-stop ever since.

Now that we've taught her to earn her own money all of her spending cash comes from the proceeds. We ask her to save at least half of her earnings for college but whatever is left is hers. If she wants to go to the movies with her friends, wants extra clothes beyond what I buy her at the start of the school year or wants an ipod Shuffle she either shells out her own cash or puts it on her wish list for Christmas. Spencer is learning the same thing and plans to start mowing lawns for his money starting this summer.

By now you get an idea of the attitude Andrew and I take towards our children and money but to be a little more specific, our Household Economic Theory can be condensed into three major goals:

Teach children the difference between Needs and Wants

The distinction between a necessity and a luxury disappeared with the invention of television and poverty in modern, industrialized nations isn't about how much food is in the cupboards but in how many gadgets are in the home.

Now someone is poor if they don't have cable or if they drive a beat-up car. Yes, there are many many people in America going to bed hungry but in general their sufferings can't compare with the extreme destitution of children orphaned by AIDS, of villages without potable water or refuges fleeing genocide.

We've come to think of too many things as necessities: sports gear, ipods, cell phones, SUVs, or bikes and the list is as endless as man's ability to invent. Teaching our children starts with teaching them what is necessary for survival, for education, for providing for their future families vs. what is merely fun, entertaining and convenient.

My job as a mother is to provide love, safety, food, shelter, clothing, medicine and access to education to the best of my ability--but beyond that the rules change. No where in the Parenting Handbook does it say that I have to provide video games, bicycles, soccer lessons, vacations, private bedrooms or a car. These things can be nice and may not be wrong to have them but the problems occur when I guilt myself into thinking I'm a bad mom or that my children are deprived if they don't have them. These things are just luxuries, life goes on without them just fine. Learning to be content with what one has is an important component of happiness and if you're always happy with what you have then you'll always be happy, right?

Learn to say "No"

If we want our children to be responsible with money we have to train them to be able to tell themselves "No" when they can't afford something and that begins by saying "No" to them first.

It may sound harsh but it's an important life lesson. The sooner a child learns that the world--or the family--has a finite number of resources and that those resources don't exist to fulfill their desires and longings the better. If you can't afford to give your child every whim of their heart great, you're teaching your kids this principle whether you want to or not. But if you can afford to provide your child with toys, trips and fun it will take a concerted effort to deny them things that they may want but shouldn't have--or, even more difficult, to deny them things that may be just fine for them to have but would lead them toward feelings of entitlement, ingratitude or laziness.

Teach children to work for the things they want

If your child wants something that isn't a necessity consider making them work for it. This will of course depend on age and maturity but a child who works for their wants will learn discipline, responsibility, gratitude, and how to work faster than the child to whom everything is given. I promise you.

We've found that if our children really want something, that is, if it's not just a passing fancy, they're willing to put in the time and effort it takes to earn it. They'll take better care of it, they'll be more grateful for it and they'll be careful what they ask for in the future. It really is a win-win situation.

"What about little things?" you're saying? Sure, all sorts of little things. Books, toys, pets, social activities, movie tickets, music, extra clothes, when they ask for those things it works to say to them "Wait until your birthday/Christmas" or "You'll need to find a way to earn it yourself."

"What about big things?" you say? Well, enough humans on the planet have worked to buy their own cars, homes and college educations without help from their parents so I see no limit to the principle. It's just a fact that if something is worth having it's worth working for and the more valuable it is, the more worthwhile your sweat and labor becomes. I see no reason why my retirement savings should go toward paying for my children's college classes and if they pay for their education themselves you can bet they'll skip classes less frequently and graduate faster. Besides, there isn't any reason that they can't pay for it themselves through summer jobs, working part-time during school, scholarships, good ol' fashioned PELL grants, reasonable student loans and attending a cheaper institution rather than an expensive, private school.

We've tried to stick by these principles and have had some success . . . generally. So far. We're not done yet so you might want to check back in twenty years but for now it's worked well. It's hard to teach them to think not in terms of "What stuff do I get?" but "How can I earn what I want?" A tough lesson but worth every ounce of effort if we can pull it off.

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I've written about just one small aspect of this subject, using my custom search engine here are a few posts that have other ideas and advice:

* Teaching my Kids Financial Responsibility by The Scratching Post
* On College Tuition, Investment and Financial Responsibility by Touched by an Angel
* Poll Results by MotherLoad: The MomAdvice Blog
* Teach Your Kids to Work: Part One by GNM Parents
* Raising Entrepreneurs: Teach Your Own Kids Entrepreneurial Thinking with a Home Business by Homeschool Blogger
* Why I Don't Give My Kids Allowances: A Conversation by No Limits Ladies
* Allowances for Kids: Teaching Children the Value of Money by Get Rich Slowly
* Favorite Book about Kids and Money? Talk amongst Yourselves by Parenthacks

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