Kids and money

As a child my education of money consisted of “we don’t have any.”  My family lived very paycheck to paycheck and there wasn’t much wiggle room.  We didn’t take family vacations, we rarely ate dinner out, new clothes were at back to school time or given for Christmas or our birthday.  We didn’t have the latest state of the art gaming system, but we did have bikes.  My childhood consisted of my mother doing everything she could to hold the family together so there wasn’t a lot of time for teachable moments.

My view of money isn’t the healthiest.  Derek’s upbringing was far different than mine so when we got married I was all kinds of confused about money.  Needless to say we haven’t had the healthiest of financial pictures over the years.  We’re working on it.  Slowly.

With that in mind and knowing the struggles my husband and I have faced I want to teach my son about money.  I want him to know how to earn it, how to save it, how to give it and how to spend it… wisely.  This post is mostly brought on by something Lauri wrote on Facebook.  She asked:

if your child gets money for a b-day gift, do you let them spend it all or make them save it or a combo?

My response was let them do what they want, it’s their money.  I want to further explain that.

I may have one of the only (then) 6 year olds who managed to save enough money to purchase an iPod touch.  Yes, my child is the owner of a (rain destroyed) iPod touch.  Not sure if you are aware of the cost of such item, but they aren’t cheap.  One day he said he wanted one and I told him he was welcome to buy one if he saved his money for it.  This wasn’t a save half and I’ll foot the other half.  Nope.  I wasn’t about to purchase an iPod touch for a 6 year old.  I don’t even own one.  He said he would save the money.

It just so happens that “Uncle” Travis was very generous with money this Spring.  Every time the boy came into the store “Uncle” Travis would slip him a $5.  However, I wanted the boy to earn a good portion of the money.  He helped Papa clean out the garage.  He would clear the table after meals (at Papa’s house) and he helped me set up the tomato stand this Summer.  There were many times when he wanted a certain Lego toy at the store and we told him he was free to buy the toy, but that would mean he would have to save longer for the iPod.  He made good choices and picked saving.  It took him 7 months to save for it and Papa and Auntie Lee helped out in the end, but the child proudly went into Target and purchased the iPod.

He did it.  He saved the money.

However, three weeks ago the child accidentally left the iPod outside overnight and it rained.  It is currently in non-working condition.  I broke the news to the child last week that in all likelihood the iPod is dead.  He said, “well… I’ll just have to save my money for another one.”  It was an expensive lesson to learn and one that broke my heart, because damn that was expensive, but he was very mature about it.

The past two years I’ve had the pleasure of working for two guys that have the money thing down pat.  Their parents taught them about money.  They did it so well they were able to open up their own garden center when they were 22 and 18.  They store has successfully been in business for 7 1/2 years now and will be around for a long time to come.  I’ve seen how healthy their approach to money and business is.  I’ve spent a long time talking to them about how that happened.  It started with their parents.

Here are a few things I’ve learned from them:

Teach your kids to work for their money.  Make them be creative.  The boys once had a business where they drove around and picked up old newspapers for recycling.  Gabe sold soda out of his locker in high school, Travis started working at a garden center when he was 15, Gabe when he was 14.  When they were really little they would pick up the leaves out of the back yard for $.01 a piece.  They’ve always worked for their money.

Loan kids money, bit very set rules.  The boys’ parents purchased large items, like gaming systems, for birthdays or Christmas.  If they wanted something large, like a new set of golf clubs, they had to earn at least half.  Their parents would foot the other half, but it had to be paid back with interest.  Inside the kitchen cupboard was a “loan sheet.”  One for Gabe and one for Travis.  If they borrowed money from mom and dad the amount borrowed + interest was written down on the sheet.  They had to pay the money back within a certain amount of time before they were allowed to borrow any more.

Set expectations young.  From the time they were little the boys worked.  They were taught to save.  They were taught so spend wisely and they were taught generosity.  All of those traits are very evident today.

So the birthday money… Oleg received about $40 for his birthday.  He’s spent about $10.  The rest he’s saving for a new iPod.  This time “Uncle” Travis won’t be slipping him $5 here and there.  We’ve talked about asking “Uncle” Travis and Papa and other people if he can do anything to earn money.  He has plans to re-open his vegetable stand in the Spring or he will vacuum your car (with his new shop vac) for $5.

In any case, he’s learning about saving, spending and working.  We’re hoping this will create a good foundation for financial stability.  What do you think?