The Bank of Mom And Dad: How To Teach Your Kids The Value Of A Dollar

Because my husband is SUCH a good writer and always full of the best ideas {I am not being biased or anything 🙂 }, I am pretty excited to have him share his thoughts on MONEY today. Now, money can be a sensitive subject in a marriage and within the family, but he has always been SO good at managing it for us, that I wanted him to share a few thoughts with all of you! Today he has, “How To Teach Your Kids The Value Of A Dollar!” Without further ado… here he is:

Photo by Start Young Financial 

Growing up I was a common customer at the Bank of Mom and Dad. You know it well too eh? Isn’t it great? 0% down, 0% interest 24-7, 365! Sadly, I was turned down for almost every loan that I applied for. Messed up right? Wrong.

My parents were sticklers on money and taught me many lessons about how to earn and save money. While other kids would hold out their hands and magically there appeared 10 bucks to go to the movies, I would hold out my hand and a lawn mower somehow manifested instead.

From my parents I learned many valuable lessons and because of them I know that I am a better person and harder working member of society.

Now that I the tables have turned and I’ve been promoted to the (Vice) President of payroll at the Davis Family Credit Union, I have plans to continue on the family work ethic and help my children understand the value of a dollar. There are many ways to do this.

Today I want to share with you a few ideas of how you can teach your kids (majority of the time without them even knowing it) how to be smart in both making and managing money. Let’s get things started with something for your small children.

THE FAMILY STORE

When I was four of five I was introduced to a wonderful place filled with toys and gadgets that I couldn’t wait to go to every Monday night.

The Davis Family Store was the invention of my parents and was stocked full of all of our favorite inexpensive toys and treats.

During the week my parents gave us little jobs. It was never much more above the attention span of an ant, but it was a chore that helped around the house. Each job was geared towards our own abilities as well as interests.

My mom made a large board of the jobs that we were required to do and the amount of money that we earned if we did that job. For a 4 year old visual learner this was a great resource for me to see the reward that I would be given to be an indentured servant. It made cleaning my room all the sweeter when I knew George Washington was waiting for me on the other side.

We were taught to divide the money we earned into separate envelopes that represented the various upcoming expenses we would have. 10% went to pay our tithing for our church, 20% went into savings, and the 70% was spending money for whatever our hearts desired.

The structure of this little store highlights many lessons for little children.

First, by having a visual board that illustrates the fruits of a hard days work helps children see and understand that chores are not just simply expected of you because mom and dad pay your room and board. It helps them do what is ultimately what every parent wants and that is to instill in your child a desire to work and be productive. Not something generally found among the snap chat generation.

Second, it opens their eyes to the benefits of using a budget. Like Dave Ramsey states in his book, they are able to give a purpose to every dollar and cent. Buying a bag of Cheetos or a bouncy ball is so much more rewarding when they know they have saved to reach that financial goal.

I learned a lot from this little store, but as I grew I learned that there was even cooler toys than bouncy balls out there that had to be bought in actual stores. This introduced me to the wonderful world of allowance.

SALARIES AND COMMISSIONS

Many parents have differing opinions about allowance and how to teach kids that are too old for the family store, but not yet old enough for an actual job. Searching the internet I found a lot of ideas all of which were great.

For our family, once our kids get to that age, we plan on more or less having a little family company.

When my wife was in the corporate world before we had kids, she worked as a sales manager for one of the greatest hotels on the Las Vegas Strip and she was smokin hot good at her job. When she started there they explained to her what her base salary was and what her compensation would be if she hit her goals.

Every quarter she was on target and did a great job at hitting her goals.

For our kids we plan on having a similar compensation package for them as well. They will be expected to complete their chores and when they do they will have a base salary (allowance) every other week because I feel it’s important to instill in them that they are valuable and their work (when they do it) should be rewarded.

In addition to their salary, they will have a list of jobs that will be less desirable but will have an alluring incentive program. These special interest jobs will be posted at the beginning of every week and each child can sign up to be hired to work on the jobs. At the end of the week their time sheets will be noted and when pay day comes their bonuses will reflect their efforts earned.

This compensation package teaches them how to real world works. There are many who come to work just to do the bare minimum and they receive their paychecks just like everyone else. There are also others who work harder and get paid more. I want my kids to be the latter.

GETTING THE FIRST ‘REAL’ JOB

As kids grow and they gain their independence through the use of the “family car” or bus pass they can now go out into the world and begin to implement the lessons that you have taught them at home their entire lives.

Whether that first job is working at the local grocery store or at a fast food joint, working builds character in our children. Even in our current economy, there are hundreds of jobs just awaiting pimply little 16 year old faces to occupy them.

To this day I still remember handing in my first job application. I was turned down for the job because I showed up in shorts and a T-shirt. I learned that day the importance of selling yourself when trying to get work. Later on during my second attempt to get a job I dressed for success and wore a suit to the local rec center for my first interview. They were impressed and offered me work. I was excited to have learned this lesson and many others through my many experiences during my high school jobs.

I encourage you to give your kids the same experiences.

THE BOTTOM LINE

Of course we all parent differently. Many will choose roads different from the one I have described here today. What is important to note is that eventually, we all grow up and have bills to pay.

Before you blink and Bubble Guppies aren’t cool anymore, make sure you have done your part to prepare your children for the world ahead.

I encourage you to sit down and come up with a game plan for your kids. Whether you have kids now or plan to in the future, it is important to always remember that it is your responsibility to show them the ropes.

They will eventually have to face the real world and it is my hope that they will be prepared to build a better future for them and for their children.

How do you or plan to teach your children the value of a dollar?

You may also like the article: Managing Money in Marriage.

Danielle is the owner of Today's the Best Day. She strives to provide creative and uplifting content in order to enrich the parenting experience for women everywhere. Danielle hopes to help you and your family to make every day the best day!

August 13, 2014 by Danielle Davis | 3 Comments