Let’s be honest: as much as we’re raising our kids, they’re raising us. None of us comes into parenting knowing everything we need to do and say to turn our kids into great adults. We take a deep breath, say a little prayer, and dive in headfirst. We mess up, we learn from our mistakes, and eventually we find our way.
The path is a wandering one, friends.
One area where many of us struggle is teaching our kids about money. Where do we start, and how do we find a balance between grace and legalism?
Fortunately, there’s an answer. New York Times #1 best-selling book Smart Money Smart Kids, by Rachel Cruze and Dave Ramsey, teaches parents how to guide kids of all ages to handle money with wisdom and generosity.
Related: Order Smart Money Smart Kids Now!
Today, we’d like to share a couple of money tips and tricks from Smart Money Smart Kids that we hope will inspire you to start the journey with your own child. Read on for the most important money lessons to teach your kids whether they’re tots or teens.
Ages 3 to 5
Work: Begin paying your kids a commission each time they complete an assigned task. Maybe they put away their toys, collect the trash cans from the bathrooms, or put dirty clothes in the laundry basket—all with your help, of course. The trick with 3- to 5-year-olds is that you pay up fast and that you make it look like lots of money.
Crumple up dollar bills and place them in a clear container as soon as the chore is complete. This little trick will help your kids see that money comes from work. Then let them spend their money on special toys or treats at the store.
Save: At this age, kids are still too young to grasp the concept of saving. Remember, all that money you’ve been dumping into a jar is essentially marked for spending. Saving will come soon enough.
Give: Young kids usually have a childlike spirit of generosity, so encourage it! If they want to give their money at church or to someone in need, don’t stop them! Just let them use the money they’ve earned. And create giving opportunities your whole family can participate in to model it for them. As Rachel says in Smart Money Smart Kids, more is caught than taught.
Ages 6 to 13
Work: Keep paying your kids commission for a set list of chores. Give them more responsibility (and higher pay) as they get older. Start paying them just once a week, so they learn delayed gratification and patience. Consider jobs outside the home too, like dog walking or babysitting.
Save: At this age, your kids need three envelopes for sorting earned cash: one for spending, one for saving, and one for giving. Help them mark about 40% for saving and 10% for giving. That leaves 50% for spending. Remember, at this age, the Save envelope is really just a bigger Spend envelope focused on a particular goal. They’re not saving for big expenses yet, so let them celebrate once in a while with a trip to the store to buy the toy or gadget they’ve been saving for.
Give: Teach your kids to place money in the Give envelope as soon as they’re paid. When the offering plate comes around at church, they should be depositing their own cash instead of yours.
Ages 14 to College
Work: Now’s the time to graduate your kids out of a weekly payday and into a checking account. Deposit the money you’d normally spend on them for clothes, entertainment and other needs. If they want more money beyond that (and they probably will!), they’ll have to work for it. At this age, they should be looking for a job outside of the home, whether that’s opening their own business or working retail. Both offer lots of teachable moments.
Save: Assign your teen a big savings goal—maybe buying their first car, paying for freshman year of college, or taking a trip with friends. You can agree to match what they save to a point or encourage your teen to go it on their own. Talk about how much money they’ll need and when they’ll need it by. Then divide the goal by the months remaining. Have your teen set aside the appropriate amount of money each month.
Give: Now’s the time to add service to giving. That means letting your teen find ways to give of their time and talents as well as their money. Encourage them to find something they already like doing and turning that into a way to serve others.
Are you ready to change your kids’ futures by making them money smart? Learn more by picking up your copy of Smart Money Smart Kids today!