Parenting and money management are two of those things that I will never have fully figured out. Just as I think, “yes, I think I found our rhythm,” life throws a curve ball. In parenting and in finance, I aim to do the best I can with what I am given. If I keep waiting for the perfect time to start something or change a behavior, I’m never going to get started!
Money management skills are not my strong point (don’t worry, I work in Communications and Marketing at Syverson Strege. I leave the financial planning to the experts!) But I know that the right time to start planning for the future is today – even if I don’t have my ducks all in a row. Much is the same with teaching our children money management skills. If I keep waiting for the “perfect time” for anything, I will never get started. Sometimes it’s as easy as just taking the next right step.
For my husband and I, the next right step in our children’s financial education was establishing basic allowances. It doesn’t always have to be complicated – don’t overthink it.
Further down the road we will teach them about opening a savings account, exploring high(er) yield investment accounts and more. But for today, we are starting small. Here are some of the things we have done when setting up allowances with our children.
- Determine an amount. Our kids get $20 a month, regardless of their age or the number of chores they complete each week. Some children get paid to complete chores. That’s not our house. Our children are expected to do their age-appropriate chores because they are part of our family and everyone in the family helps. Again, there are some very complicated ways to calculate age-appropriate allowances with chores as variables. You can go that route, or you can go simple. The important thing is to just get started!
- Set a payday. We pay the last Friday of every month because I know if we agreed to pay our kids weekly, they would never get paid. Know what you can consistently implement and try to stick to it. But don’t be afraid of pivoting! We started off with the idea that we would pay our kids weekly and quickly realized that we would never have enough cash on hand to be able to keep up.
- Decide on a savings goal. Our first-born decided that he wanted to save up enough money to purchase an electric scooter. He did some research on the cost and then did the math on how long it would take to save. After that he drew a savings chart and every payday, he colors in how much closer he is to having enough. When he’s tempted to spend his dollars on gum or concession stand treats, we remind him of his savings goal.
- Establish 3 S’s – Spending, Saving and Sharing. Not all their money is theirs to keep. Our kids figured out very early on that dollars are set aside for spending, saving and sharing. Being a good steward of their money means they also get to figure out what goes where. Just like we make a plan for our money when we get our paychecks, our kids need to allocate their money when they get paid, too!
- Make room for mistakes. As much as I want to keep my children from failing in the world, I know that failure is inevitable and that “safe” failing in adolescence is a good thing. My kids are going to waste their allowance at the concession stand on candy and popcorn. Or they’re going to use their savings on something they’ll regret later. But they’re also going to know how hard it is to earn a dollar and wait for the thing they’ve been saving for. And, hopefully, they’ll also learn to cherish and treasure what they used their dollars on.
My job as a mom is to teach my children how to become adults and to create safe places for them to fail. Giving them the gift of financial education, talking about money and how to manage it, is just another way I’m helping my kids become adults. Parenting is a lot like effective financial planning and saving: “It takes patience, attention and consistent choices.” I’m taking parenting and money management one tiny step at a time!
*Photo by Ivory House Photography
