Thursday, 23 June 2011
A few years ago, I was part owner of a small business that my sister-in-law and I literally ran for love. In other words, we didn't make ANY money. $0.00! As a matter of fact, there were times we bought supplies from our own pockets and donated to the business. Many times. In the words of my friend Charlotte, "what in the honkin' world?" Why would we do that? Kids. Lots of them. Sixty to ninety kids each week were impacted by this work of love.
We also employed a handful of teenagers and young adults. They did get paychecks. Itty bitty paychecks but paychecks all the same. Because the payroll was so small, we paid them once a month. I'll never forget the day one of them approached me about paying them more frequently. I explained that if we paid them more frequently their total paychecks would be very very small. It just didn't justify the amount of work it would take to do payroll more often. The reply, "Well, we're young and we aren't good with our money like you." (For the record, I'm only six years older than this particular young person. lol)
It's important that we train our kids to be good with money. We don't ever want "youth" to be an excuse to be irresponsible stewards. We want to spare our kids the pain and humiliation of financial distress. We want them to have the ability to manage their earnings and their spending habits.
Different methods work for different families but ultimately the same principles apply to all.
Principle 1: Be an example. Budget. Save. Give.
Principle 2: Start a system that links household responsibilities with earning money. Our kids accumulate X's by choosing chores from a chart. They decide how hard they want to work and which of mom's chores they want to do. They don't get paid for their own responsibilities (rooms, toys, clothes, etc...). Only the extra things they do.
Principle 3: Teach kids to save up for the things they want. Teach patience and diligence (aka delayed gratification). This will pay huge dividends later in life. Our kids have a wish list for things they want to save money for and eventually purchase. Our older kids even have long-term goals of saving for a car.
Your kids will be in charge of their own financial futures whether or not you teach them the right way to do it. Don’t wait until they come back home broke. - Dave Ramsey