January 26, 2012

Category: Money Management

Teach Kids about Money Matters: 5 Easy Tips

I remember hearing my mother complain about us kids leaving the lights on, leaving the television on, leaving the water running, leaving the door open and leaving the house without completing our chores.  After becoming a dad with two often absent-minded children of my own, I found myself constantly irritated when they neglected to turn off energy sucking appliances or failed to perform their household tasks before easing into chill mode.  

The Irritation Tax  

One day my wonderful wife, who grew tired of hearing my booming voice as I barked commands repeatedly, decided to tax the kiddos for our irritation.  After a request to perform a task fell on deaf ears, that non-compliant child received a tax.  Every subsequent failure to comply resulted in an additional financial penalty.   

Cost of Doing Business            

I’m a firm believer that there’s a price associated with doing just about everything.  On the other hand, there should be a price associated when you don’t do the things you’re supposed to.  Imagine if professional athletes had to return a portion of their multi-million dollar salaries when failing to maintain a scoring average or missing too many free throws.  In my house, the kiddos have to do just that; forfeit money for poor performance.   

Taxable Offenses 

  • Talking Back
  • Clothes left on the floor
  • Leaving bedroom lights on
  • Leaving the Television on
  • Not putting toys or games away
  • Smacking at the table
  • Rude or crude comments during dinner
  • Unkind comments about one’s siblings
  • Incomplete homework
  • Walking up late for school
  • Getting to bed late
Give and Take

Our society employs standards for measuring our production then subsequently rewards or punishes us for production or the lack thereof.  I believe proactive steps are necessary when training our children for the world in which they will soon become wage-earning tax-paying citizens.  At the beginning of each week, the children are given a $10 allowance for taking out the trash and putting away the dishes after dinner.  Of course, they are also partly responsible for the general tidiness and efficiency of our home.  Therefore, taxable offenses (failure to produce the desired results) dictate they give back a portion of their allowance per infraction.  I may sound like a military drill sergeant but it really does work.  Fines range from .25 to $1.00 so there’s plenty of opportunity for the kids to maximize their production and in turn manage their income/expenditures.   

Tax Sheet   

Some time periods are much busier than others in my household.  We’ve found that keeping a running tally or tax sheet helps to keep the record straight.  That way, no one misremembers the number of infractions which occurred or how much money is owed when the last day of the week arrives and it’s now time to pay up.            

Bonus Bucks

I am also a firm believer in catching kids doing good and rewarding them for exceptional behavior.  It’s an awesome incentive for inspiring more of it.  When my children go out of their way to help out (without being asked) I make a special notation in my Tax Log of who went above and beyond and how much bonus money I think the action was worth to me.  Generally, helping with the laundry or getting to bed on time for several consecutive days (without prompting) are the kind of deeds that warrant an extra .50 to $1.00.  By the end of the week, they sometimes earn an additional $5 or $7 bucks for simply doing more of what builds character, makes them better humans and makes us prouder parents.   

Teaching kids about money matters is an excellent way of reducing anxiety in parenting.  It also restores order in the home and prepares kids to be more responsible for their own success.    You’ll be surprised how much they appreciate a chance to shine.