One of the questions we get asked most often about teaching kids about money is what we call the money we give our kids. I always think this is such a funny question because I don’t really believe that what you call something makes much difference at all.
In our family, we call the money we give our kids to cover the majority of their daily expenses an allowance. You can read more about that here. In reality, our kids’ allowance is much closer to a salary. In exchange for the money they receive, the kids are expected to do their assigned work around the house, be pleasant and cooperative members of the household and work to their ability in school.
Teaching Kids About Money Using a Corporate Model
Often times in life people find they need to get a second job to make ends meet or to be able to afford something extra. If our kids find themselves short on cash, we encourage them to do the same thing.
We think of the financial training we give the kids as training them for their first job. To hold a salaried position at a company, you not only need to do what is expected of you, you also need to be pleasant, a hard worker and a team player. If you are not, you’ll find yourself in an uncomfortable position and maybe even unemployed.
In a “real” job, if you do exemplary work on a project, consistently do more than is expected or go “above and beyond,” you’re likely to be considered for a bonus. Likewise, while we don’t pay our kids for good grades, if they do something completely out of the ordinary, they are likely to receive a reward of some type. As parents, it’s fun to be able to reward greatness from our kids since they aren’t used to us buying them things on a daily basis.
So, if you’re having trouble deciding how to start teaching kids about money in your home, maybe thinking about it in terms of training them for future employment will give you a basis for getting started.
What do you think? Will this method work for your family?