Thursday, August 21, 2014

Avoiding Summer Slide (And Beyond) - #3 Financial Awareness

Several summers ago, when I was growing tired of Peanut and Pumpkin asking me for snacks, treats, etc every time we went into a store or past an ice cream shop, I decided that I needed to give my kids more financial responsibility.  I was tired of saying "No", but I certainly wasn't about to start saying "Yes" to all of these extravagances.  I took several steps to increase their financial awareness.

1)  More responsibility at home.  
My girls have been doing chores since they were tiny.  Before they could even speak in complete sentences I would have them find all of the socks in the laundry.  That was their only job - find socks. Then we moved on to finding socks and matching them.  Eventually they found, matched, folded and put socks away in the appropriate drawers.  Now they can pretty much do their own laundry from start to finish.  While we prefer to do it all together - we've had some amazing conversations over the laundry basket - the girls can handle it if I ask them to do it.   This is just one of their "required" chores. Just as no one pays me to cook dinner or drive the girls to practices and events, Peanut and Pumpkin do not get paid for required chores.  (Each year I reevaluate what the girls are capable of doing and modify their chore list.  During the summer they are able to do more than they are during the school year.)

2)  An opportunity to earn their own money.  
While the girls don't get paid for required chores like laundry, wiping down the bathroom sink, sweeping and vacuuming the kitchen floor (essentially cleaning up after themselves), they do have the opportunity to earn money by doing other chores.  The paid chores are listed in the kitchen pantry with the job, the frequency with which it can be done, and the pay rate.   If Peanut and/or Pumpkin are saving up for something, if they are bored, or if they just want to earn a little spending money, they can look at the list and choose something to do.  (FYI - My pay rate is pretty low.  The girls don't really need an overabundance of spending money.  If they have too much, then they don't really have to think too hard before making financial decisions.)

3)  Keeping track of their money.  
Since the girls are earning money, I think it is also important for them to keep track of it.  Peanut and Pumpkin have a checkbook that has a record of the money they've earned and the money they've spent. When they earn money by doing a chore, they add it to their checkbook (which I keep in my purse). This works well for us for a couple reasons.  1 - I don't always have to have cash to pay them for their chores.  2 - They are learning to balance a checkbook.

4) Making their own financial decisions.
Now, when the girls ask for some item that I think is silly or frivolous, I don't have to say "No".  I simply tell them that they can buy it if they have enough money in their checkbook and decide that they want to.  The change in their desire to spend money is amazing.  They are so much more aware of how much things cost.   For example, Peanut loves ICEEs.  Every time we would see a place that sells ICEEs she would ask to buy one.  Now, she asks how much it costs.  Before, she didn't realize that the same item can vary in price from $6.00 at a theme park, to $3.00 at the mall, to just over $1.00 at Sam's Club. This new appreciation for the value of products is refreshing.   I've found that both girls check prices even when we're shopping for items that they need and know that I intend to buy for them.

So far, these four steps have worked really well to make Peanut and Pumpkin more financially aware and more financially responsible.  Do you have any tips that you use with your kids?


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