Please, Mom, I need the sparkly jeans. Everyone else has them. Please!
When children beg for things in stores, it is annoying.
I need them!
Why don’t kids appreciate what they already have?
You are so mean!
Because teaching youngsters about money is not an easy thing to do, I decided to ask advice from the leading expert, Neale Godfrey, who has written sixteen books dealing with money, life skills, and values. Her books include Money Doesn’t Grow on Trees: A Parent’s Guide to Raising Financially Responsible Children, which was number one on the New York Times best-seller list.
She generously agreed to chat with me about this topic, and here are excerpts from our conversation:
Q: Can you offer some tips for teaching kids about money?
A: Kids should get an allowance. They must do chores. There is no entitlement. There are two kinds of chores, work-for-pay and citizen-of-the-household. Citizen-of-the-household chores are things like brushing teeth. Work-for-pay can be something like setting the table. You set up a job chart and check off every job that they complete. You celebrate their successes.
Q: Once they have the money, do you help them manage it?
A: You do a budget. Budgeting is a life skill. You get four clear plastic jars or four clear plastic pouches. The first jar is for charity. You take 10 percent right off the top for charity. When kids are little, you pick the charity and as they get older, it can be something that they are interested in. The remaining 90 percent is divided into thirds. The first third is quick cash. It is instant gratification. They’ve worked hard and they can buy something they want. You set the ground rules: no chocolate, no candy, no automatic weapons, whatever. Then they can choose. The second third is medium-term savings. You are teaching them to push off instant gratification and save for something bigger that they want. The last jar is long-term savings, for college or their future.
Q: How do you figure out how much allowance a kid should get?
