What Do You Teach Your Children About Money?

boy with moneyI wonder what people teach their children about money and how they do it, if they do it. Do you set an example? Do you specifically teach some kind of philosophy?

My son has his Sun in Taurus conjunct Saturn and I have no doubt he is going to be able to manage money. Matter of fact, his Sun, Moon and Ascendant are all in Venus-ruled signs with Venus elevated so I’d not be surprised if he were to become known for his money but in whatever case, he is going on 12 years old and I’ve just come up with the new money rules.

First, I told him that I was going to double his allowance but from now on he would be responsible to buy Christmas and birthday gifts for people with his own cash. I explained he’d have to think ahead and save and budget his money and he looked positively thrilled. The responsibility appeals to him as does being treated as if he’s achieved a degree maturity.

Since that worked, I asked him today if he might prefer being paid at the first of each month rather than weekly. “Like a paycheck,” I said. This was a hunch. I know my kids likes large bills and my thought was he would prefer this over having small amounts doled out to him.Β  Sure enough, he went for that.

“And would you like to open a savings account?” I asked. “I have a savings account for you but this would be your own account. I’m thinking you should start learning how to save money, say 10%.Β  Saving 10% of whatever you get from whatever source would be a good start. Get paid once a month and make a desposit into your savings once a month, what do you think?”

He’s going for all of it.

I know someone whose kid started clearing snow for people as a young teen.Β  At 17, he had 3 snow-blowers and two employees. Sweet!

What do you teach your child about money?

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What Do You Teach Your Children About Money? — 11 Comments

  1. I was never taught about money. As a family member, we were expected to help out without being paid.

    I can’t rightly explain where my knowledge of how money worked came in, but I’ve never had serious financial struggle, thank goodness. It’s always just made sense that bills cost money and so what you have coming in needs to go to that first and foremost, with a certain percentage saved for “the unexpected”.

  2. Sweet Guidelines Elsa ;o)!
    That’s our plan, but both are a bit young to be responsible to buy presents for others on there own money (but that’s where we’re headed). So they both help pick the gifts and we go over the “dollars and cents” of it all (pun totally intended LOL!). We try to explain how you allot it, etc. With a sadge and taurus, they are very good gift pickers. The oldest also has 5 planets in gemini, so the budgeting will probably take more effort, but hopefully that taurus sun will rule the day.
    Angie

  3. he works for his spending money. at this point i try to give him advice on what to think about when he decides to spend it, but am hands off for the most part (if h tried to buy something i don’t wat in my house that might become an issue, but it hasn’t come up.)
    sooner or later i’ll get him his own savings account, but right now i just have the college fund.
    but he’s still seven. things will change as he expresses more maturity. at this point he’s still figuring out relative pricing… what can you buy for $20?

  4. We’re back! His dad gives him a weekly allowance so I like the variance. He sure took to it. I showed him how to deposit a check, how to deposit cash, how to approach the teller and make a deposit, and how to use the night drop.

    He also knows how to cash a check for cash, as he is now a bank customer and has this privilege (to cash a check he might have got for Christmas on his own).

    I told him this was a big day; the start of his empire as he is Italian and this is what he do – we build empires. πŸ™‚

    He was of course, thrilled. πŸ™‚

  5. My parents were not effective money managers. My mother had no trouble finding men who could earn money easily, but both men died with basically nothing because they couldn’t manage it and were both ill and uninsured at the time of their deaths. They often lived beyond their means, in expensive homes in affluent neighborhoods, driving exotic cars. At one point my bio dad owned two Mercedes and lived in an absolutely stunning home in Laguna Beach, complete with 180 degree ocean view. But he died penniless with a $300K IRS tax bill due. Go figure.

    As I got older and had kids of my own, I read lots of books about money and came up with my own ideas of what I wanted to spend it on. These ideas are generally very different from the norm, especially for my income level which isn’t super high but it’s above average. For example I don’t own a clothes dryer, I don’t spend money on cable TV, and I rarely eat out. Also, I am self employed which gives me a ton of options to save on taxes, way more than if I was a standard wage earner.

    Sometimes while running errands with my kids, when they’d see a nice car they’d say, “That person is rich!” and I’d say, “No, we don’t know that. What is probably true is that the person has DEBT.” I had to instill this into them over and over, that just because somebody drives a cool car does not mean they have money. In the vast majority of cases it means they have debt and interest payments… not the same thing at all.

    I guess it’s important to some to look good to their friends and neighbors… but man that’s an expensive way to go.

  6. I’ve got as far as giving him an allowance out of which he has to buy his own comics and sweets – I don’t buy any of that for him. Since he’s not been raised to eat sweets he spends it all on comics or saves for a book.

    He’s remarkably savvy about how much things cost and how long he’d need to save for something he wants. As he gets older I’m planning to teach him more about budgeting for necessities, rather than just feeding desires.

    He has a Taurus ascendent and Jupiter in the 2nd, so I think he has a natural grasp of these things, but as someone who was never taught about budgeting or investment and had to learn much later in life, I’d rather he didn’t have to learn the hard way like I did.

  7. My daughter started working with me at a fairly young age. As a result she has a fairly good work ethic and has enjoyed the benefits of having a good deal more spending money than I would have been able to provide. She has good basic job skills and a good work ethic and she is confident in dealing with people professionally. I have no doubt that this real world experience is going to benefit her through out her life.

    My younger son told me recently that he had $11. When I asked him where he got it he explained that a kid at school had been buying silly bands from him for some time for $1 each! I suggested that it isn’t really appropriate to be wheeling and dealing with other kids without parental involvement. This same child has said that he doesn’t want to be a comedian because they don’t usually make a lot of money. We are a family who value creativity so I’m not sure where he got that idea but I didn’t argue. I won’t squelch his conventional business sense. πŸ™‚ Maybe he will grow up to be his rock star step brother’s manager.

  8. We did this with allowances and gift money:

    1/2 to savings
    1/2 to spend

    He was also given a heifer calf by us when he was 10 that he kept and bred her yearly after she was old enough. He sold the bull calves and kept the heifers back for breeding so he had a nice business going when he started FFA in high school.

    When he was about 12 the lightbulb came on and if you saved more and spent less you could save for bigger things. He bought his first truck when he was 14 and he and my husband rebuilt it and made it cool so he was a proud 16 year old. πŸ™‚

  9. I like your plan. How about setting aside an allocation percent for charitable giving (like you’ve done for the 10% savings) to introduce him to philanthropy at an early age, and I’ll really love the plan!

  10. Bill, that is very smart. I will absolutely introduce that but before I do, I have to make sure I am giving 10% myself and while my husband DOES give 10%, I am less consistent but this will change. Thanks. πŸ™‚

  11. Elsa,

    Doesn’t have to be 10% – whatever makes sense for your particular situation. In fact, you might consider letting your kids pick the percentage. That’s what we did with our 5. They each had different rationale for picking slightly different percentages – which I think is valid since I like the notion of philanthropy being a very personal thing.

    Cheers, Bill

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