The following guest post is from Kyle James of Rather-Be-Shopping.com. Learn more about Kyle following this post and a sampling of the best coupons from his website.
Have you ever tripped over a pile of toys in your kid’s room? Toys that seem to multiply but yet never really get appreciated or played with very much. Or perhaps cleaned out the minivan only to find a toy under the seat that seemed so important to your daughter at the time you bought it for her, but was quickly discarded for the next best thing? Both of these scenarios happened to me and I knew there had to be a better way.
A better way to teach my three young children the value of money and the proper value of the “stuff” that money buys. One of my biggest concerns, as a Dad, is sending my three kids out into the real world with no money smarts, which leads to a life of zero savings, and worse yet, a life of battling credit card debt. Here are the five things my wife and I did to turn things around in our home.
1. Teach Them To Value Money – A couple years ago, my son really wanted a Nintendo DS. The sticker price of $150 was shocking to me. But I told him, “Sure you can have one, you earn the money and save up, and I will personally take you to the store to buy one.” I then planted the seed of recycling and turning in our cans and bottles for money. He jumped all over it. Not only did he save and sort our recyclables, he also hit up all his grandparents for theirs.
After he had a sizable haul, we would take them down to the recycle station and he would unload them and even sign the receipt. He finally saved up enough money for the Nintendo DS. It was a great experience for him and taught him that money does not just grow on trees. It has to be earned by hard work and dedication.
2. Give An Allowance – My kids are just now getting to the age where they can start earning an allowance by doing chores around the house. This is also a great way to teach the value of an earned dollar.
The psychology of money is amazing to me. I have noticed in my kids that when they earn money they are less likely to waste it on something trivial. They will want to save it in their dresser drawer for something special that equals the value they have put on the money. Whereas if I give them a couple dollars to spend at the store, they will buy some candy or toy that usually ends up on the floor of the minivan.
3. Savings Account – When each of our kids were born, my wife and I opened a savings account for them. We add birthday money and Christmas money from the grandparent to their accounts every year. When the statements come, I make a point of talking to them individually about how much money they have and how much interest they have earned. They get very excited with the news that they have earned $1.75 last month by doing nothing at all.
The idea of saving money for things like college, or their first car, has to be planted early and often. My hope is that it will help to remove the sense of entitlement that is so prevalent with kids today.
Editor’s Note: ING Direct, one of my favorite online banks, recently added a kids savings account offering that may be of interest to parents looking for a safe place to park accumulated allowance money.
4. In Order To Receive, You Must Give – It happened the other day in the car and it gave me goose bumps. My 6 year old daughter was whining about why she could not have some toy. Tired of her whining and without thought or hesitation I quoted Rich Dad, Poor Dad, “If you want something, you first need to give.” Silence. I let that thought just hang in the air for at least 15 seconds. I could see in her eyes through the rear view mirror that her mind was working overtime trying to understand the concept.
This led to a great conversation about giving, whether it be toys you don’t play with to a charity, or time spent teaching your sister how to ride a bike, and how these things will bring you much more in return than you could ever imagine. I then explained that by being generous, people are going to want to be generous to you. By taking time to help someone else, others are going to want to take the time to help you when you are in need.
5. Personal Responsibility – They are responsible for the money they receive from allowance and otherwise. When it’s gone, it’s gone. So I tell them that it’s their responsibly to save it wisely or spend it wisely if that is what they choose to do. And definitely don’t leave it laying around the house or it may end up back in my wallet!
The idea of personal responsibility carries over into other aspects, like “You say you want dessert tonight? OK, well, let’s look around the house and make sure all of your responsibilities are taken care of. Then we can discuss dessert.” You do this enough times and you stay consistent, they will take care of their personal responsibilities long before they come to you asking for something.
Do you have any tips to add when it comes to raising “money smart” kids? I look forward to our comments. Another aspect of being money smart is using coupons when you do make a purchase. Here are some of the better online coupons on my website right now. Thank you Jason for letting me contribute to the Frugal Dad blog.
Get 12% Off your entire online purchase thru this link (New customers)
Coupon Code: None Needed
See All: Smart Bargains Coupons
About The Author: Kyle James owns and operate a website called Rather-Be-Shopping.com which specializes in online coupon codes for over 700 stores, organized in 25 shopping categories. He also has a blog, where he writes about frugal living tips, creative ways to save money, and other musings about the adventures and mis-adventures of raising 3 active kids.