Sunday, 24. November 2013 by Renee Ellison
Our recent podcasts have been focusing on teaching the principles of personal financial management. The current broadcasts have been addressed to adolescents. This blog post contains some quick tips for how best to teach financial soundness to younger children.
Give each young child a GLASS jar (gotta be able to SEE money accruing in there—as opposed to an opaque piggy bank, which is like dropping money into a black hole). Write the child’s name on some tape and affix it to the jar. If the jar is skinny, like a spice jar, the child could fit it into his or her school box, along the edge, if they use a box to house their textbooks.
Then you, as the parent, go to the bank and trade in dollars for rolls and rolls and rolls of NICKELS. Nickels are BULKY, so that makes it look like the children’s money is accruing FASTER. Also, nickels are also easily divisible in small increments for dividing later, at the end of the week when they divide up their nickels between tithe, savings, spending money and taxes. (Taxes are the money that is given BACK to the parent. This shows the child in spades that he NEVER gets the whole dollar of what he earns.)
Then tell your young children that ANY TIME THEY WANT to earn money you will pay them a nickel for every ten minutes of work. You have to start with small increments with small children, because you have to have room to INCREASE their pay over time. If you start paying them too much, in the young years, you’ll find the raises unmanageable later. If the children are wasting time, or squandering it on media, TV, or computer, pull them off and say this is EARNING MONEY time—we will never get today’s hours back. We’re building a FINANCIAL FOUNDATION and you never get a second change to build a foundation of savings so that money can begin to EARN money—e.g., buy tools or whatever to make MORE money. FOUNDATIONS are everything. Imagine building a house without a foundation. Your children’s financial goal is to secure a nest egg. The more visible their progress toward that goal, the better.
For much more on this topic, check out our additional resources here.