What We Want Them to Learn Part 1: Money Management

In my last post I attempted to clear up some common misconceptions about unschooling, two of which were that we don’t care what our kids learn and that even if we do it won’t be enough to prepare them for the future. I briefly touched on both of these issues but I think it’s a topic worth exploring a bit more.

I do believe living in the moment is important and feel very strongly that childhood is not merely preparation for life but is part of life. But I also care a great deal about what my kids learn and if they are prepared for the future and have therefore spent a great deal of time thinking about how to acknowledge and honor the importance of  both the present and the future. Pumping them full of information that may or may not “stick” doesn’t seem to be, in my opinion, a good way of doing this. Instead we’ve opted to weave some key life lessons into the fabric of our lives. These lessons include (but are obviously not limited to): money management, kindness and empathy, logical/critical thinking, reasoning skills and the ability to plan for goals.

Ironically none of the things we find most valuable for our kids success are taught in any curriculum. So, if not from a curriculum why have we decided to focus on these key elements and how are we implementing them? That’s a big question and the answer is a bit long so I’ll be attempting to answer it over the next few posts. I’ll start with…

Money Management:

Why we chose it:

We’ve had our fair share of missteps with money, especially early in our marriage. Fortunately though, we were both raised in homes that modeled the importance of living within your means so we only suffered minor setbacks instead of total derailment by some of our bad decisions. For that reason I want to pass along the idea of living within your means to my kids. But I also wanted to go a step further and help them understand budgeting, saving for the future and living well on less. We have lived on vastly varied incomes over the course of our marriage and it hasn’t greatly impacted our quality of life because I am pretty good at managing money. I want that for my kids- the ability to live well no matter what their income. If they can achieve that then they will be more free to make life choices based on their wants instead of only thinking of  their basic needs.

How we facilitate learning it:

From the time our kids were very young they’ve had an allowance. It has varied in amount based on our income and how much responsibility we felt they were ready to take on. It is not directly tied to chores (mostly because this would give them the option not to do things if they decided they don’t want/need the money). Instead we’ve always tried to instill the idea that in a family everyone shares the responsibility to the best of their ability and the bounty to the extent of their capability. This means as you grow older you take on more responsibility to help maintain a happy, smooth-running home. And as you grow older you get more of the bounty and are more responsible for deciding which wants are your priority.

When the kids were very young (around 5-ish) they were only responsible for helping me clean up their toys and they received a meager $1 per week to spend as they wished. Most of their wants, such as a snack at the gas station, were still covered by us. As they mastered this level of responsibility more chores and more allowance was added. By the time they were about 8 and 9 they were up to $10 per week and doing more things around the house (such as learning to help with their laundry) and paying for more of their wants (such as those candy bars at the gas station). Then we decided to homeschool and their allowance (along with our income) was cut in half.

Because they understood that the family bounty was smaller they took this in stride. I sat them down with a print-out of our monthly budget and showed them what our bills were, what was left over and how we were sharing it. I think this also helped reassure them that even though we sometimes told them no about things we used to happily pay for and were cutting back on a lot of household extras because we were earning less money now it didn’t mean we were poor- we could pay our bills and still have a little left over. The left over was simply less. We also talked a great deal about the idea that when we earned more money we traded it for things like satellite television and eating out. Now we were choosing to trade money (in the form of less income) for more time together as a family and learning in a new, better way (for our family at least). The idea that money is a tool used to get what we want was somewhat new to them (maybe to all of us) but it was a great lesson.

Since that time, each time our income increases we reassess their allowance and what they are responsible for. And then, fairly recently, they both requested a raise but our income hadn’t changed. At first I said it simply wasn’t possible but because they are accustomed to taking on more responsibility with discretionary spending they were able to convince me to rethink things. They would be willing to become responsible for more things if I could find some wiggle room in the budget to increase their allowance. They said they’d be willing to pay for things like admission to homeschool events and snacks and soda I was allotting in the grocery budget. I was impressed with their idea so I looked over everything and decided that if they were willing to take on more responsibility with the spending then I was willing to give it a try. We discussed all of our expectations and came up with a plan which is hanging on the fridge until we adjust to the new way of doing things. It reads:

You are getting a raise in your allowance because as you get older you are able to be more responsible for decisions about how you spend your money. This raise means that you will be responsible for more of your non-essential expenses.

You will now be responsible for:
-Playgroup expenses such as entrance fees and concessions
-Birthday and holiday gifts for friends (Christmas, Valentine’s Day, etc.)
-Fast food and snacks while running errands and doing playgroup/co-op related activities (we’ll still buy snack items to keep in the car)
-We will buy snacks and lunch items for the house from the budget list. However if you want something not from the budget list you will be responsible for buying it yourself. We will also provide budget drinks such as Kool-Aid and tea but you will be responsible for buying soda, chocolate milk, etc.
-We will pay for Halloween costumes up to $15 each. You will be responsible for anything above and beyond that amount.
-Kya, we will continue to pay for ballet lessons but you will need to pay for accessories such as shoes, special clothing, etc.
-Jace, we will pay up to $40 per month for fees at Pixelated or other activities that help you get out of the house. You will be responsible for anything above and beyond that amount. You will also be responsible for Xbox Live and Game Informer renewals.

I believe you are ready for the responsibility of being more in charge of your money. However, I know that sometimes things are harder than they seem so I want to reserve the right to revisit this topic if any of us think it’s necessary.
-If Dad or I start to think you are not being responsible then we’ll meet again.
-If this becomes a financial hardship for us we’ll also have to meet again.
-If there is a great deal of complaining, whining, dropping out of social activities or attempts to make me feel guilty about not paying for things then we will need to meet again.
-If you feel like the arrangement isn’t fair in any way we will need to meet again.
-If you feel like the responsibility of keeping track of your money and expenses is too much we will need to meet again.

This has been hanging on the fridge for about a month and it’s going really well. The kids have been great about not asking for things and spending their money wisely. They have more control but as a result they’ve been more cautious, not less. It’s far easier to spend your parents money than your own so this has greatly curbed a lot of their “I wants”. They don’t feel overburdened or overwhelmed by their new expenses. Everyone seems happy with the new arrangement so far.

Are they learning it:

Overall our choice to help the kids learn about handling money by actually having money to handle has worked really well for our family. Our kids have learned that they can’t get everything they want not because we tell them but because they’ve had to make choices of their own. They’ve learned the importance of saving not because we lecture them or force them but because some of the things they want cost a lot and they can either save or do without. We rarely give advances (and it has to be a really special circumstance) so they know that you save first, then buy. Most of all they’ve come to see money as a tool to reach a goal not the goal itself. They save for college, they save for big ticket items, they don’t save so they’ll have stacks of money to count and hoard.

They have certainly made mistakes along the way and sometimes I am cringing and biting my tongue until it bleeds at the choices they make. But they learn from these missteps and I’d rather they learn it now and miss out on going to a show or the latest American Girl than learn it when they are older and the stakes are much higher.

As they grow, things continue to adjust. Jace turned 13 recently and received a letter from the bank that he’s now eligible to have a debit card with his savings account. He’s been using one of our cards to make online purchases for a couple of years now and he always lets us know what he’s doing and gives us the money up front. We’ve always been up front about our family budget and he understands there has to be real money to back up the plastic so it has never been an issue. We’ve been discussing how it will work when he gets his own, how he’ll make sure he’s still saving and keep track of everything. So, soon he’ll have that new level of responsibility. And I’m not at all worried if he’s ready to handle it.


9 responses to “What We Want Them to Learn Part 1: Money Management

    • I completely agree- the earlier the better! I’m always happy when others find a kernel of something useful in my posts so thanks for commenting! 🙂

  1. Fabulous! As someone who grew up with no clue how to manage money (save for a brief “how to keep/balance the checkbook” lecture in a school club, I feel like this is imperative. The mistakes I made as a young adult are just now starting to back off, after years of struggle and hardship (including losing my first home and only new car I will ever buy). I also struggle to help my kids learn this task, as I am new to controlling my money and my spending. There are some great ideas in here that I think I can apply to our family!!

  2. My parents always taught me to save, save, save! I don’t want to blame my parents, but I never really learned the skill of appropriate spending. If I saw it and had the money, I got it. Hard lesson learned while I was single and then when I married, another hard lesson learned. We’re just now recovering from poor spending habits that occurred about 4 years ago. I really don’t want to go through the stressors of that again!

    Oddly enough, I’m staying home now, making 1/2 less than I did working outside of the home and some how we are managing! I was so nervous it would completely sink us, but we’re making it and actually figuring out how to afford “wants” again….with planning, saving, and communication!

    I never earned an allowance as a child (would have loved that!) 🙂 However, my husband & I have discussed giving our children allowances. I really like how you set it up & included it with your children. They are obviously well-adjusted, mature, and responsible children in order to process and understand their role in the family and how money fits in their lives and the families survival! Well done Hope!

    Thanks for sharing!

    • It can be hard to know the right balance and I certainly don’t blame my parents either- I think we all do the best we can with the information we have at any moment. When we know better, we do better.

      We had a similar experience with being surprised by how easy it was to live without my salary after initially being afraid.

      I’m glad you are finding your footing and thanks for reading!

  3. This has given me a lot to think about. Most importantly, that I should probably start giving my kids an allowance (I started at one point, then it got away from me…mostly because I never have cash on hand…especially singles!) because if we don’t have room in the budget for something then they are welcome to buy it with the money in their piggy banks…but that money is dwindling fast! They’re okay with that because they know that “Mommy and Daddy are saving our money for Disney World” but that they’re welcome to spend their money as they would like.

    I loved this: “Most of all they’ve come to see money as a tool to reach a goal not the goal itself.” My family is full of money-hoarders…saving for some emergency that may or may not ever happen, and not living their lives in the meantime. They see the way we handle money (we save as we can while we are living our lives…we’re not willing to stop doing everything for a “someday” event that may or may not happen) and think it’s irresponsible. (My mother thinks I don’t know how to balance a checkbook just because I do everything online so I don’t. Seriously, Mom?) I don’t want my children to be like that…accruing vacation days and staying home instead of doing things that they want because all the money needs to be saved for an emergency. Or retirement. Here’s a news flash…not everyone lives long enough to retire. I want them to live their lives. I want them to be able to handle money responsibly, and be able to provide for their needs and some of their wants on meager incomes, so that they can follow their dreams.

    We had no idea how to handle money for a really long time. Somehow it always worked out, but we just had no clue. That “life skills” class I took in high school wasn’t actually a good education in money management. Who would have thought?

    I love how wonderful your children are. They’re amazing. I could say more about that, but I think that about sums it up!

    I can’t wait to hear more on this topic!

    • The more stories I hear like yours (and my own) the more convinced I am that making sure kids have actual money to learn about money is the right choice. Thanks for sharing and helping me know I’m on the right track! 🙂

      I completely agree that money shouldn’t be hoarded. We do have some money we set aside for retirement or the kids education (it’s all in the same fund) but we don’t put all of our eggs in that basket and we try really hard to strike a balance between planning for the future and living in the present.

      And thanks for the nice things you said about my kids- I have to say that I completely agree. 😉

  4. Pingback: What We Want Them to Learn Part 2: Logic and Reasoning Skills | Hopeful Insights

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