Teaching a child that saving for the future can be very difficult. I remember growing up and constantly arguing with my parents about saving my money. As a child, I did not understand why I should be saving for my future when it seemed so far away. Now, as a parent myself, I do understand and am taking steps to teach my children what I was too stubborn to learn when I was a child.
My children always want new things. They want new shoes when they do not need them, they want new toys. You name it, my kids want it. Unfortunately, I am not in a position to buy them everything that their little hearts desire. I am in a position, however; to teach them a little bit about finances and how important it is to save money as they grow up.
To teach my kids a bit about life, I implemented a system in which they can earn “money” by doing daily chores and things that are required of them. I designed this system by putting a value on everything they do throughout the day. I have to admit, I also did this in the hopes of getting them to help out around the house more.
I bought a dry erase board, the markers, eraser, and play money. I sat down and determined what each daily task value should be. I also wanted them to learn that you can be penalized in life for not following the rules, so, I also had negative values for breaking rules. Another aspect to my little system was to teach them that in life, you have to pay bills.
I spent several hours on the making of this little system. In the end, I had it figured out pretty well. They would be able to earn up to ten dollars a week and I had decided that half of that would be saved for the future. So, if they cooperated with me, my children would have five dollars in their pocket each week to spend as they wanted, or save for something that they really wanted, and five dollars put away in the “Bank of Mom” to begin saving for their futures.
I sat my kids down and explained the system to them. They would earn money for daily activities and chores; they would also lose money for breaking house rules. If they failed to do chores, they would not be paid for those things they did not do. They would be getting paid, with the play money each night before going to bed. I gave them each a bank to keep this play money in. On Friday, they would count their play money. Out of what they had earned, they would have to pay a certain amount for their weekly “bills”, and whatever was left over, they could give to me for real money. Half of that money would go into the “Bank of Mom”, and half would go into their pocket.
The excitement they displayed for this little system was a welcome change from their usual balking at chores. They were now enthusiastic about doing homework and chores because by doing this, they could have money in their pockets each week. The problem I was having was when it came time for them to put half of their money away for the future. They became very angry at me and at one point absolutely refused to cooperate. I could not make them understand that they really needed to save money for later in life.
They soon began not to care about my system anymore because they didn’t want to save money at all. At one point, they told me that the only reason I wanted them to put away half of their money was because I was going to spend it!
I thought about what they said to me, long and hard. I came up a solution. I would continue with the system, with one alteration. They would have the option of whether or not they saved half of their money. I figured that when the time came, and they wanted something that cost more than what they had in their little pockets, they would begin to understand why they should save.
The time did come. It didn’t happen with the oldest child, as I thought it would, it actually happened with the youngest. A few weeks went by, and they all had their money just burning a hole in their pocket. They were always in a hurry to spend what they had. One particular week, the youngest wanted to buy something that was fifteen dollars, but only had ten dollars in her pocket. She asked me to loan her the money. I saw this as my opportunity to make a point to all of them. I told her that I could not loan her the money. She asked the two older kids, and they told her that they wouldn’t have enough to buy what they wanted if they gave her any of their money. The tears rolled, but I held strong to what I had told her. I told her that if she saved the money she had until the next week, she would be able to buy what she wanted. Of course, that was not good enough, at first. Then, it was like a light turned on in her head, and she smiled at me.
“Mommy,” she said, “you’re right! If I save my money, I can buy this next week and I will still have money left over!”
“Wow!” I thought,” I finally got through to one of them.” The other two kids followed her example. They both had things that they really wanted, and decided that they too would begin saving their money.
My little lesson seems to have worked. Now, whenever they earn money, they put money into the “Bank of Mom” to save for the future. My oldest, who is eleven, asked me how much he will have saved by the time he is ready to buy a car. I sat down with him, and we did the math. Between what he can make from me each week, his new paper route, and work he will be doing during the summertime, he will have saved over $13,000 in a five year period of time. That information alone was enough for him to want to save his money.
It is important for us to teach our children the importance of saving for the future. Even at a very young age, they have goals they want to reach and material items they all want to have. My little system has been the beginning of a more financial secure for my children when they grow older. I just hope that when they are all grown up, they remember the lessons I am trying to teach them.
I know a few people who have adopted this little system from me, and they too have told me that it has worked to help their children learn to save money. The funny thing about this lesson is that all of the children I know who have really learned it, all started out complaining about saving money, and now, all of them are happy to do so.