Building a Better Budget: Teaching Kids About Money

Since my husband and I have started taking Dave Ramsey’s Financial Peace University class, we’ve had some great conversations about money and our budget.  We’ve talked a lot about how to cut expenses and paying off debt, but we hadn’t talked a lot about how we can share the things we’re learning with our kids!  Thankfully, they covered that in our class last week!  Dave’s philosophy is that you don’t give your kids an “allowance”  Instead, you give them jobs to do each week, and those jobs are tied to “commissions.”  He talks about how it’s important to teach your kids that work is tied to money, which ties in with the commissions concept, rather than that money comes just because, which is the allowance concept.

We tried this for the first time last week.  We met on Sunday night and explained to our kids that they were going to have a checklist of jobs to do each week and that if they did their jobs, they would be “paid” for each job.  The list included things like making their beds, cleaning their rooms, and helping out with other household chores like picking up the family room and wiping down the kitchen table.  Payday was the following Sunday and the kids were so excited that they each earned $5 in commissions that week!

Then, came another lesson.  The lesson on saving, giving, and spending!  Being kids, their eyes lit up as soon as they were paid and my five year old eagerly began talking about all of the things he was going to buy with his money.  I don’t think he’s crazy about the whole “saving” concept yet, but we plan to take them to a local credit union to open their own savings accounts and hopefully, that will give them a better understanding.  I can still remember when my parents took me to open my first account when I was a kid and how excited I would get each time I got to go to the bank to deposit money!

How do you teach kids about money?  Do they earn money or do they get a weekly allowance?

Want to know more about our journey to save money?  Check out our Budgeting Basics post here and find out how we are going to be saving $4200 this year–>  Budgeting Basics:  Know where your money is going

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  1. Here in nj an allowance is earning $ from spying chores. Yes my kids do earn one I don’t label each job, but besides the basics(making bed picking up after themselves ect) they can chose to do extra for cash. If they are misbehaving they get check & money is deducted from what they’ve earned.

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