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.