Feb 28

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How to Teach Kids about Money ~ Part 3

how to teach kids about money

How to Teach Kids about Money.


Welcome back! If you need to catch up on the first part of this series, you can! The other posts are: How to Teach Kids about Money ~ Getting Started and How to Teach Kids about Money ~ Part 1 and How to Teach Kids about Money ~ Part 2. Now we’re going to get started with part three!


How to Teach Kids about Money: Kids Budget.


Please remember that every family is different so different methods may work for you and yours! Keep an open mind and test out what works for your family’s life and your child’s personality, age, and learning style! This is what we do with Jorryn.


I think I have tried about 100 charts with Jorryn to help motivate him. In the end, it just wasn’t working and for whatever reason, I had a really hard time remembering to fill out those stinking charts every night! We have done away with the chart method for the most part. I do have a “reminder” list for him since I work hard to not nag him about every little thing and have him work on it himself.


Simple Instructions Kids To Do Sheet PROOFThis is what Jorryn’s reminder sheet looks like.

Next, we set up envelopes for Jorryn. He has Share, Spend, and Save. His “income” is $20 per month which is paid on the 1st of each month. I give it to him in $1 bills and it is split between the three envelopes. He puts $6 in each envelope and then chooses what to do with the remaining $2. When he receives gift money for his birthday or Christmas, he is allowed to determine what he’d like to do with that money. He also is able to earn a bonus for being extra helpful. I never announce “I am paying you a $1 for this job” ahead of time but at times when he is especially helpful or does something extra around the house without being asked, I will award him a little something extra and I make sure to explain exactly what type of positive behavior led to the extra cash. (Jorryn needs lots of positive reinforcements!) This bonus money is also his to determine what to do with.

For his Save envelope, we discuss what he would like to save up to and then find a picture online. The picture goes in the envelope with his money along with the written dollar amount on the picture. At the time of goal setting, we also discuss how long that item will take to save for. We have also started discussing extra ways to earn extra money to get to that goal faster.


For his Share envelope, he can choose to take it to church as his tithe or he can choose another charity. He makes that choice for himself each month.


For his Spend envelope, when the money is gone, the money is gone! There are no loans from Mom & Dad! That may seem harsh to some, but it’s reality. If you aren’t going to use credit cards as an adult, then a parent covering extra money for a child doesn’t teach them the lesson. They will always expect that someone will cover their extras. Better to learn now and not set your kids up for a lifetime of debt!


When setting up Jorryn’s budget, we agreed exactly what Mom & Dad covered and what Jorryn covered. We also agreed that Jorryn’s “income” comes from being an active member of the family. This means helping with dishes, helping set the table, helping take care of trash and laundry, keeping his room picked up, plus having a good attitude. We agreed that parents pay for needed clothes, meals, friend and family gifts, school supplies, and his sport fees. Jorryn covers any extra clothes or toys and hot lunch at school. This money comes out of his free spending envelope unless he chooses to save up for an extra special shirt or toy. We have had an extra challenging time with him cleaning his room. For example, in the morning I will let him know that he can choose when he wants to clean during the day but that his room must be picked up by X time. I also let him know that if it isn’t done by that time, I would be happy to clean it for him for a $1 fee which comes from his Spend envelope. Unbeknownst to him, I put the $1 in a savings account for him but all he knows is that $1 is no longer free for him to spend. We have had a few times where I got paid to clean, but once his monthly amount was dwindling, it certainly made him re-think paying mama for the job! The first couple of months of his envelopes, the first time we went to the store that month, all his money was gone and the very beginning of the month. Now he has worked a little harder at saving money to use throughout the month!


A final note on loans: there is one time I will allow a loan to happen. When Jorryn is out of spending money and his chooses to say a bad word or have me clean his room, I will charge him interest on his $1 and he has to pay me back on the following months spending money. This was one of the hardest decisions for me to stick with. It seemed so cruel. But, I would rather his mistakes be made and lessons learned now while he is young and the consequences are small than for him to grow and learn the lessons with big consequences.


This is what works for our family right now. This may certainly change in the future. What we do for Jorryn might be completely different for Zane and Shay once they start to learn.


Please join me next week for the rest of the How to Teach Kids about Money series!

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