Inspired by some recent reading, we had a money management lesson yesterday morning. After Michael was down for his morning nap (a necessity in this case), I gathered the kids in their room and brought along my supplies to begin their new money management system! I instructed them to find all their money which was not an easy task. Children are children and they somehow tend to stash money in all kinds of places. A couple of hours later in a stray coin purse we even found five dollars more belonging to Jacob.
We spread out on the floor and I began teaching. But it was so not "teaching". It was the best kind of lesson with results I am thinking we will enjoy sticking to. We sorted their coins and bills and counted everything up. I kept a running tab for each child. Once we had our totals (some of this is money they have been receiving for years), I explained to them how they were going to give 10% each month to savings and 10% each month to the church or a charity of their choice. They were so receptive and excited. The idea of donating is not foreign to them. The children give money on a sporadic basis, but we want them to build the habit of regularity in this area. We put all the leftovers aside as "spending money" even though not all this will be spent in the near future.
We took a notebook we already had and gave each child a section to record their earnings and spendings. Can you see the accountant in me coming out?
We started with our total and then subtracted 10% for their savings (S) and 10% for donation to the Church (C). Then we figured up their balance. Our plan is as follows.
- Anytime the kids earn or receive some money (gifts, payments, allowance) we will enter it in the "earned" column and put the money in their "Spending Money" bag.
- Anytime the kids spend some money we will enter that amount in the "spent" column.
- On the 15th of each month we will take the notebook and calculate donations and savings based on what they've earned since the last 15th of the month. Their donations will go in their envelopes for Church and their savings will go in their banks in their room.
- Our intention is to not touch the money in their banks and pay them a very small amount of interest each month (any ideas?)
- We are also planning on payday for allowance each Friday - again something nominal (any thoughts on how you do allowance?).
I am really hoping that this will work well for us and teach them a lot about how to manage money and develop certain periodic habits, such as donating and putting away money in savings. I am excited and I think they are too.
I'd love to hear your ideas and suggestions.
3 comments:
That sounds great! We do something similar, only more visual for them. We put any money they recieve/earn in their piggy bank. On the first of the month (Pay day!), we divide them into three envelopes: 70% Spending, 20% Saving, and 10% Giving. It has to be in an envelope before anything can be done with it. This serves two purposes: 1)Teaches them not to spend as soon as they get - wait and plan 2)allows us to get them started on a "Dave Ramsey" plan from the start.
We've been doing this for a year now and it works very well. I do keep the envelopes put up (like a bank) and I will review the contents with the child whenever he requests.
Why don't you use a real savings account?? I have an account in each child's name that is at ingdirect.com. They earn close to 5% interest and there is no minimum balance. I am the meanie though. I require that 50% go into savings, unless it is birthday money or holiday money.
The kids don't give money to charity or the church yet. They give away books and toys periodically throughout the year. The toys seem to teach a more valuable lesson on giving than money. The money concept is too vague and not concrete enough for them. But Katie does learn about interest from the savings account.
In terms of allowance, there isn't one. They get a quarter for helping with tasks such as unloading the dishwasher or other things outside the normal realm of expectations. Again, I am cheap.
But it seems they find money all over the place, and their stash builds quickly. Grandparents tend to help the cause too, by handing out spare change.
Sounds like a great start to a plan. If you want to try the ing thing, let me know first, since we can bank an extra $10 off referring you, and you get something like $25 to $50 just for opening an account with them.
Oh, and I purchase the coin wrappers at Walmart and we periodically wrap coins and take them to the "big bank" to exchange for dollars. Good practice in counting money.
Celeste...
I love this project! My kiddos aren't quite there yet, so I don't have any good suggestions for you. I'll be coming to you for suggestions in a year or two!
Thanks so much for your kind comments on my blog. My email is meganliving @ yahoo.com. Let's chat!
Love in Christ,
Megan
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