Posts tagged Kids & Money

So…Should I Give My Kids Allowance? (Part 4 of 4/Kids & Money)

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If you’ve been following the money conversation so far, you’re probably wondering, “How does allowance fit in to all this?”

Personally, I choose not to use an allowance, but I don’t believe that allowance is necessarily a bad thing, depending on HOW YOU FRAME IT.

What I do is prioritize helping my daughter earn money in lots of different ways, and let her know that I’m available to support her to earn money for whatever purchases are important to her. I remind her in good time before something is coming up that she might need spending money for, and make sure I put aside time to spend helping her figure out how she’d like to earn that money. I also offer her opportunities to earn money. For example, I was hired by a school to interview potential new families to the school, and she came along to greet the families at the door, show them where to hang their coats, and introduce each family to me and to the teacher who would be working with the child. I then paid her a percentage of my earnings for that day.

Here are some things to consider when deciding whether and how to use an allowance:

To teach a child that every family member is responsible for caring for the home and family, I generally recommend avoiding connecting household chores with allowance, especially if you are going to dock money for chores not done. It becomes too easy for the child to make a negative connection…”Oh! Well, I don’t need the $5, so I’ll just take the week off of my chores.” Instead, help the child to understand that household chores are what we ALL do to make family life work.

HOW you talk about the way you share money with your children is extremely important, and leads them to establish beliefs around money and the relative value of other things, products, services, generosity, etc. For example, if you give your child an allowance of $20 every week, with no explanation, they will absorb something different than if you give your child $20 each week and say, “In this family, we all share the fruits of our labours. This week, I earned money at work, and I am sharing it with you. You and I worked together to clear ice off of our sidewalk, you cared for our dog, and dad cooked dinner tonight. We all benefit from all of our work for our family.”

On the other hand, if you give your child an allowance of $20, after asking, “Were you good this week? Did you do your homework? Did you listen to your teacher?” your child will absorb the idea that money is a reward for somebody else’s definition of “good” behaviour. Remember that when a person sees something as a reward, the intrinsic interest in the activity needed to earn the reward DEcreases, and the desire for the reward INcreases. So, if you are using money as a reward for “good” behaviour, your child will become LESS motivated to produce the “good” behaviour independently, and more interested in the money.

This, of course, brings up the question of whether money is a “reward” for work when we are adults. Remember that our beliefs make a big difference here – the meaning we give to the exchange matters a lot. If we see money as a reward for drudgery, bestowed upon us by a judging external “boss” or “The Man”, our relationship with both work and money will be affected. If we see the results of our work as valuable to the world, and the money we earn as equally valuable, we are comfortable with the exchange, and we maintain our intrinsic motivation.

So, as I mentioned in the first part of this series, YOUR beliefs about money matter a lot, and will be passed on to your children, unless you are intentional about sharing something different, AND changing the beliefs you don’t feel serve you. Hint: To figure out if you have any unhelpful underlying beliefs about money or work hidden in your psyche, start journalling with sentence starters, “Work is….” and “Money is…” Repeat the sentence starters over and over, and write stream of consciousness until you’re empty of associations.

The bottom line about allowance is, AFTER you’ve clarified the beliefs you want to share with your children around money, IF you choose to give an allowance, decide HOW you’re going to frame the allowance so that your child is receiving the healthy messages you intended to share. One example of framing the allowance in an intentional way is above, in the quotation beginning with, “In this family we all share the fruits of our labours.”

There are lots of healthy, creative ways to support your children to become responsible with money, but the underlying beliefs are always key. Make sure that the messages you are sending your children are clear, and NOT wrapped up in the muddy waters of rewards, punishments, praise, shame, or fear. This way, your child can start off his or her lifelong relationship with work and money feeling confident and positive.

Please share how you support your children to understand money! We’d also love to hear any questions that you have.

 

How to Stop Your Kids from Begging for Stuff at the Store (Part 3 of 4)

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“Mommmmmmmmmmmyyyy!!! Pleaaaase! You NEVER buy me anything!!” If this sounds familiar, this blog post is for you! If it doesn’t, read on for some tips to help your child earn money, and also learn to value money and effort.

When you’re just starting to introduce the idea of earning money to your child, and your child asks for something at the store, if it’s an ethical YES from you, but you don’t want to buy that thing for your child, you can enthusiastically answer, “Yes! Let’s find a way for you to earn the money to buy that! Would you like to write down what it is and how much it costs, so that we can come and get it once you have the money?”

As your child begins to learn to earn and save money, you’ll be able to say, “Hmmm…that’s not in my budget today, do you have any spending money or is that something you’d like to save for?” Parents who’ve done this consistently, AND seriously supported their child to find ways to earn money (see next paragraph) find that their children rapidly stop begging for things at the store.

To help your child learn to value things appropriately, find ways to support your child to earn and spend his or her own money at a young age. Since age 3, my daughter has been taking back bottles for grandma and grandpa (with my help, of course). At age 4, she held her first lemonade stand, and paid back the cost of the lemons, honey, ice, and little cups. At age 5, she picked weeds for grandpa at the cabin for 5 cents a weed, and made Christmas cards to sell at a market. At age 6, she made ceramic necklaces with my mother, an artist, and sold them at a market and on Etsy. At age 7, she participated enthusiastically in our garage sale, selling her own things. At age 8, she sorted through her baby toys and I posted a “Living Room Sale” on Facebook. For several weeks, people made appointments to come to our home to buy her baby things, she ran the sale, and we split the proceeds. Now, almost 9, she has a dog walking business called “Small Dogs Only” and has had a few sporadic and one regular client.

With each new experience, she begins to see how much money is needed to reach a specific goal. 80 weeds were enough to buy an ice cream.  Three bags of bottles is enough spending money to make it through a four-day summer festival, with all the ice cream you can eat and probably a special silver ring or t-shirt. Two months of bottles and 3 weeks of dog walking earns enough spending money for 10 days in California. Two regular dog walking clients, twice a week each, plus savings of about $1000 (she’s halfway there) is enough to get and maintain her own dog, including medical care and pet insurance, spaying or neutering, food and toys, occasional pet-sitting when we travel, etc.

Supporting your child to earn his own money is a significant time investment on your part, but well worth the effort. It establishes you as a mentor, helper, and gives your child an understanding of interdependence, and confidence in himself.

Another key to helping your child learn to value money and effort is to sit down with your whole family and write a list of all the things that need to be done to run the household. This includes things like “Pay mortgage”, “Pay for lights, heat and water”, all the way down to things like, “Feed the cat” and “Empty the dishwasher”.

This long and complete list will help your child put everything you need to do and spend money on for the home in perspective. After making the list, all family members can step forward to say what things they will take responsibility for.

Then, when you’re at the store, you can also say, “I have set aside this money to pay for our mortgage, our food, and our heat. I have $2.50 of extra spending money on this trip, the rest of our money is for our regular expenses.”

As an added bonus, doing this together with your child can help him or her know that his or her efforts are valued and that he or she is and important part of the team that makes your household work.

Stay tuned for my next blog post to address the tricky question of whether or not to give an allowance!

And please tell us below what works for you and your family! We’d love to hear all your money-related tips!

You can read the first two blog posts in this series, too! Go here to read about How NOT to Have Grown Up Kids Still Asking You for Money, and here to find out if you’re Sharing These Key Money Skills With Your Kids.

 

Are You Sharing These Key Money Skills With Your Kids? (Part 2 of 4)

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So, if you’ve read my last blog post, you’re on the right track to getting your messaging around beliefs about money down. The next step is to figure out what practical skills your children are learning about money management and how money works. Here are a few basic ideas that can be shared and reinforced overs years to help your child get a strong foundation in the basic concepts.

One of the key ways to reinforce these ideas is to share out loud what you’re doing when it involves money. Involve your child in as many of your banking and paying transactions as possible. Either explain what you’re doing, or have him or her help with the process.

Here is some key information and important skills to share:

Money needs to be stored in a special place to avoid losing it. There is no need to elevate money above other things, though – help your child take care of ALL the things he or she is a steward of, from toys to clothes to food to pets, by storing and caring for things appropriately.

If you find money, big or small, pick it up, return it to its owner if possible, and if you keep it, store it carefully. Remember that you are teaching processes – whether it’s a penny or a twenty.

Start with which coins are worth more than others (age 2+). Later, name the coins, and help your child figure out how many of one kind of coin makes another (ie 2 nickels are the same as a dime, 4 quarters equal a loonie, etc) (age 4+). When at the store, ask which things cost more and which less (age 5+). Money math is a great way for a child to be motivated to learn mental math, and eventually, a child can do basic record keeping and set and track savings goals (age 5+).

Splitting money up from the beginning makes it easier to understand the value of money. My daughter splits all her earned money into thirds. She has a “Save Forever” account, a “Dog Fund”, and spending money. The “Save Forever” money is for something big and long term, and we talk about it all the time. It may be so that she can attend a special university, buy her first home, take a trip to a special destination, or all of these things. Her “Dog Fund” is so that she can have her own dog. Her spending money is shared with charities, used for gifts for friends, and used for her own spending choices.

Take the time to explain how a bank works, and how a credit card works. Draw a big red line on a piece of paper, and set out, or draw a picture of each option. On one side of the line, show your child all the different ways to pay for things WITH YOUR OWN MONEY, and then, on the other side of the line, show your child ways that you can pay for things WITH BORROWED MONEY that you have to pay back. Introduce the concept of interest as soon as your child understands it (5+).

Show your child that the way we spend our money doesn’t just mean WE get something – it has a much bigger effect. The systems that produce the things that we spend money on are supported by our money. If we don’t want to support certain situations or products (child labour, the production of cheap plastic that just ends up in the landfill, unfairly traded goods, etc), then we can choose not to spend money on things produced by those systems. On the other hand, we can support things we believe will make our world better when we spend our money, too (local businesses, eco-friendly products and services, fair trade, organically grown food, etc).

You don’t have to send your child to money school to share these messages – just share what you’re doing, and help them along the way to understand the next idea that they’re developmentally ready for. If you share something, and they don’t get it right away, try again a few months later, and remember to repeat and build on key ideas over years.

Keep your eyes open for my next two blog posts – How to Stop your Kids from Begging for Stuff at the Store, and The Allowance Question.

In the meanwhile, if you haven’t read my post about helping kids develop healthy beliefs about money, check it out!

And please share your experiences with sharing money skills and ideas with your kids below!

Need a little coaching? Go here to find out more about coaching with Lisa Kathleen!

 

How Not to Have a Grown-Up Kid That Asks You for Money (Part 1 of 4)

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I’ve been getting lots of questions lately from parents thinking about whether to give their kids an allowance, but I think the question is much bigger than this. The bottom line is, you don’t want your kids growing up and still depending on you for money (trust me on this), and in today’s world, money management is more complex than it has ever been.

Our culture promotes high levels of debt, and a recent study showed that the majority of young people entering universities didn’t know the difference between a debit card and a credit card.  There’s also a lot of talk these days about how young people feel entitled, and are entering the work force with low skills and high income expectations. Conscious parents are asking how to raise a child with a solid and healthy understanding of what it takes to earn money, manage it, and feel good about the process.

As an entrepreneur, and a person who is still learning about money myself, I have lots to say about this. Whether you choose to give your children allowance is less important than the context, conversation, and opportunities you create around money. There are a few main areas to think about, and we’ll cover them in the next four blog posts. We’ll talk about how to help your child establish healthy beliefs about money, develop strong money skills, learn ways to earn money, and, finally, address the question of kids and allowances directly.

First, let’s focus on the beliefs your children are absorbing about money, and how you can be intentional about introducing helpful beliefs instead of unhelpful ones.

Most importantly, remember that the beliefs YOU hold around money, and how you relate to it, will be passed on to your child. Your child will unconsciously identify and absorb and duplicate patterns in your behaviour – whether you are consciously aware of those patterns or not. We know that what we believe has a powerful effect on how we live, how we feel, and the reality that shows up in our lives – this applies to money, too.

So, ask yourself: Does money stress you out? Is money something that you get mad, worried, or fearful about? What are your beliefs about money (money is the root of all evil, rich people are bad, you don’t deserve money, earning enough money to live is exhausting, etc) and how have those beliefs served you? If you’re not happy with your own relationship with money, get some support in this area by reading books, finding a mentor, or working with a money coach who specializes in understanding and changing beliefs and patterns that don’t serve you.

Next, start to notice your behaviours around money and your child. Do you spend money thoughtlessly, on anything your child wants? They may end up believing that money is NOT valuable – easy come, easy go – and you may find them saying, if something gets broken or lost, “we’ll just buy another one.” Do you control the money, not allowing your child to keep or use money? They may end up believing that they are not responsible enough to handle money, or that they need to be financially taken care of.

Then notice the sentences that you repeat about money, and the context you put them in. Consider phrases you repeat and the beliefs you are actually wanting your child to absorb, and compare them. If they are in alignment, go with it. If not, consider creating a new phrase to substitute for the ones you use that don’t feel right to you. For example, “Money doesn’t grow on trees,” or “we can’t afford it” might become, “Let’s prioritize and plan ahead so that we spend the money we’ve earned on the things that are most important to us.”

Once you’ve identified the beliefs, behaviours and words about money that you are sharing with your child, you can carefully choose what you want to continue sharing, and what you don’t. Next, adjust in these three areas so that your beliefs, behaviours, and words for the messages about money that you WANT your child to absorb are in alignment with your intended messages.

Please share your thoughts, feedbacks, and experiences around money messaging below!

We’d love to hear from you.

 

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