Whether you homeschool your children or have them in a public or private school, kids need to learn to be good stewards of money. Homeschooling affords many opportunities to fit in lessons throughout the day. If your children are in school all day, you need to focus on finding or creating the opportunities. In the post “Teach Your Children Well,” I share ways to get your very young children to become aware and interested in money. In this post, we’ll cover some ideas for children who are a little older, perhaps later elementary grades or even middle school.
Wants versus needs
This is one of the most important ideas to instill in your kids: the difference between things we need and things we merely want. There is nothing wrong with wanting things but being reminded often that there is a difference between wants and needs is beneficial. As kids start getting older, this becomes even more important. They see things their friends have, and those become things they want.
Having conversations throughout childhood to contrast needs and wants will help build the skill of discernment when it comes to budgeting in adulthood. State the obvious as you buy things.
For example, I was with my daughter, Rowan, in a store recently, and I was admiring a beautiful, colorful scarf. She said, “Mom, you should buy that to wear to work!” I was really considering it, but I thought about the number of scarves I already had and realized I didn’t really have a need for a new one. So, I shared my thoughts with her, emphasizing that while it would make me temporarily happy to buy this scarf, eventually it would be in a drawer with several others, and likely, I would rarely wear it. I didn’t need this scarf, I merely wanted it. She nodded her understanding, and we moved on. Modeling the behavior you want your kids to develop is critical.
Help them set saving goals
If you model the behavior that we save for the things we need and want, this is the natural next step. When your child expresses interest in a larger purchase (e.g. a new bicycle, a pair of fashion boots, a musical instrument), get excited and help them create a goal for saving for that item. As a memorable learning opportunity, you can really work this hard, parents! Have them set a reasonable deadline, compute how much they might have saved already, and work out ways they can get more money to apply to their goal.
If it is a large purchase relative to their savings and income potential, but one that you would support their buying, offer a matching program. Maybe for every dollar they save, you will match a dollar. This might be the needed incentive to get them focused on saving. If they only need to save half the money, it will be far easier to accomplish!
Remember to praise them lavishly when they save their money versus blowing it on short-term satisfaction. Building the saving discipline early will pay enormous dividends in their adult life.
We work for money
Opinions differ on the best way to structure giving your children allowances. In our house, we recognize that as a member of our family, each of us gets an allowance. (If you want more ideas about allowances with your spouse/partner, see my post here.) Also, in our house, we acknowledge we all contribute to the household work that needs to be done to maintain our home. Rowan has had age-appropriate chores for years. Any time she grouses about it, I simply remind her that Daddy and I also have chores that we would prefer not to do. Doing this work is part of being a responsible member of our family.
Some families elect to tie chores directly to the allowance, creating more of a fee-for-service model. If you choose this structure, it’s fine. But if you choose the model our family uses, you can still drive home the message that one must work for money. When Rowan complains about my having to go to work, I remind her that my work helps provide the money our family needs to buy groceries and keep the lights on.
In our situation, Rowan accompanies me to my office once a week, where she has a “job.” She assists with office tasks and is thrilled when she is able to do more advanced tasks. I have even taught her how to properly request a wage increase! Since we homeschool, and I run a business, this arrangement makes sense.
If that is not your situation, you can still drive home the value of hard work. Offer pay (or additional pay if you structure your kids’ allowances as fee-for-service) for bigger, irregular tasks around the house. Cleaning out the garage, washing vehicles, and large yardwork projects are examples of tasks for which you can offer the incentive of additional pay. Be sure to establish clear guidelines on what acceptable work looks like and then turn them loose.
When your children earn money, help them divide it into money they will save and money they can spend. It all boils down to habits and discipline, so get them started early!
How do you teach your older children about money?