Learning The Value Of Money
When I am asked, “What do you do? I answer by saying, “I am a financial counselor. I work with couples and individuals who want to improve their relationship with money.” Many times, the response I get is, “my son or daughter could use your help” or “children should be taught about money in school”. I think what people are saying is they are concerned about how children as adults will be able to handle money so they can support themselves and no longer be dependent on family for financial support.
Children start learning about money and how they value it early in life. They learn to be stressed about money if the adults in their life are stressed about money. Or, they learn “money grows on trees” because they get everything they ever wanted and ‘then some’.
Recently, I had the opportunity to visit with friends whose children have grown into self-supporting adults. I wanted to know how they taught their children about money. It was interesting to hear each family tell stories about what they believed helped their children learn about money.
One couple helped their 8th grade daughter open a checking account and had an allowance deposited (like getting a paycheck) each month. The amount of the allowance was jointly decided on by the parents and daughter. It was determined by money needed to cover clothing, activities and other routine expenses. Their daughter learned about balancing her checkbook, ATM fees and overdrafts while having guidance from her parents.
This same eight grader opened a credit card account co-signed by her parents. This was an opportunity for her parents to explain to her about late charges if the bill did not get paid by the due date and how interest can accumulate, even though her purchases were relatively small. Her parents did make it very clear if the balance was not paid by the due date she would lose the privilege of using the card.
One family used eating at restaurants as a way to teach their children about the value of money. When the check came to the table, the children added it up to make sure it was correct and figured out the tip. Then the children would bring the money to the cashier.
In one family pizza was always the Friday night treat. Dad would only let them order pizza if they could come up with a pizza coupon. There were always pizza coupons to be found in desk drawer by the phone in this home.
Another family planned their vacations with their children. They let them in on how much they had to spend on lodging, transportation, meals and entertainment. They showed them choices available. This helped their children see the tradeoffs such as a week of camping versus a shorter visit to Disneyland.
To make saving money an incentive parents in one family offered to match savings. This worked well to encourage their children to save a portion of their allowance or save all or part of gift money from grandparents for something special they wanted.
On turning sixteen a son in one of the families wanted a car. His parents were agreeable, if he paid for it. After weeks of looking and not coming up with an affordable solution, their son thought of calling family friends who had recently purchased a new car and hadn’t sold the old one. The good news was, the car was for sale. The bad news was it wasn’t running. For a $1 and towing fee, the car was his. He used savings and his own income to get it running. The parents have fond memories of their son and his friends hanging out in the car parked in their driveway for a full day even though it was not drivable yet. The car became a family legend and the son learned about the value of money.
These stories show how life on a daily basis offers many opportunities to learn the value of money with regard to choices and trade offs. It is important to stick to boundaries originally agreed upon. It is easy out of love or just less hassle to take care of money mistakes children/teens make. Instead, acknowledge their dilemma and ask them for their solutions.
Recommended reading for the next bedtime story is The Richest Man in Babylon by George S. Clason. This is an inspirational book about the secrets to acquiring money, keeping money and making money earn more money. This is a great story to share with children. Sweet dreams and prosperity!