As soon as our son started understanding money, my wife and I began teaching him to earn, save, and spend wisely. We made many financial mistakes early in our marriage. Fortunately, we have learned better management techniques in recent years. We pass those techniques onto our son, age 12, so he can make better decisions earlier in his adulthood. Learning money management now will enhance his decision making in the future.
Earning his money
We insist that our son earns what he gets. We rarely just give him money or buy material possessions. We provide his food, clothing, school supplies, and other needs, but we make him earn extras. He works routine chores such as dishes, putting away groceries, and general house cleaning. We give him extra household jobs when they arise. He must complete them on time, correctly, and without complaint. Poor quality results in repeating the chores. Continued poor quality means working chores free.
Minimum savings
We pay our son a base of five dollars each week plus bonuses he earns from extra chores. We have him keep a minimum of twenty dollars at all times. We maintain a minimum threshold in our checking account for unexpected costs; we have him do so for the same reason - to have money available when he needs it. As he gets older, we will increase that minimum, especially when he opens his first bank account, which is not far away.
Saving and working toward a goal
Our son loves electronics. He knows that he must earn what he wants or save his own money for it. He will set a goal. For example, when the Nintendo DSI came out, he began to plan toward the $170. He already had approximately $120 total from saved cash, gift cards, and trade-ins. Instead of asking us for the rest, he asked how he could earn the money. We had him work extra chores such as pulling weeds, helping with laundry, and extra cleaning duties. In less than two months, he had earned enough to buy the DSI himself and keep his $20 minimum.
Careful consideration when spending
Our son earned the money, so we let him buy the DSI. We discussed spending the money first. We explained that once he spent the money he would have nothing left except that $20. He would have to restart his earnings and savings. We made sure that he understood these rules before letting him make the purchase.
We reinforce this understanding each time our son wants to spend a larger amount of money or buy something frivolous. Times have occurred in which he later wished that he did not spend his money unnecessarily; he wanted something better such as a new game for his DSI. He had to restart the plan and take longer to reach his goal.
Respecting our money
Occasionally, our son runs up some of our costs. For example, he recently tried to log into a favorite Website but accidentally signed up my cell phone to receive daily horoscopes by text message. His failure to read small print led to the mishap that charges $10 per month to my bill. I do not have a text plan, so three messages added another dollar. I made him cancel the horoscope and pay me back the eleven dollars. The payback stalled his savings plan, but he now knows to read details carefully. Other instances such as not eating his restaurant meals have led to more paybacks. Paying us back for unnecessary charges teaches our son to respect our money as well as his.
We believe in teaching our son to handle his money carefully while young. These lessons will translate into responsible financial behavior when he becomes an adult. He will then make better financial decisions when they matter most and avoid many of the mistakes that could put him into financial trouble. We prefer to treat him a little harshly now rather than seeing him make poor decisions later.
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