I asked fellow Parenting 2.0 LinkedIn group members, “How do you share your money wisdom with your children?” One father’s response really impressed me so, that I decided to share his engaging hands-on approach to preparing his four children for the real world. I will change the name for the sake of privacy, but the creative method this father uses to run his household’s finances andto teach his kids basic money management skills set a new standard. Read on below.
One of the ways my wife and I presented our family to the children was as a small business. Either of us would alternate as CEO and Chair of Reader-Reader and Progeny. The children were stockholders who had input. Voting was based on income. We started this practice when the children were 7,9 and 13, (before the fourth child joined us). These meetings were held quarterly until they went off to college. Meetings could be called as necessary. We laid out our budget with income as the first entry. They saw our pay stubs showing taxes, SS, etc. We explained the difference between Gross and Net pay and what our hourly pay was based on a 40 hour week. No over time pay in our circumstance.
We rated and ranked expenses (with their “input”). Periodic shopping trips would single out the cost of individual items, in the context of our established budged based on income and our value system. Periodic review of receipts were reflective. The biggest shock for them was the amortized mortgage schedule. They found it hard to believe. Other elements included: defining the square footage of the house and how much each room cost per square foot based on our income; pro-rated schedule for utilities; etc. We addressed savings: 1)Retirement; 2) funded depreciation; 3) contingency. Since they went to private school, we gave the monthly check to each one on a rotating basis and asked them to take it to the business office, get the receipt and bring it back. I’ve shared with approach with parents, young people and some congregations. They find it refreshing, while having bursts of laughter. The most challenging aspect of these meetings was the annual discussion of the will, POA and Advanced Directive. These are a few of the ways my wife and I talked to and taught our children basics about money.
Signed Mr. Reader
What do you think? Is there something you can include in your process or is it too much? Let me know what you think by leaving a comment below.
Samirian Hill, The MoneyWise Teacher, is the President and Founder of BudgetWise Financial Solutions, LLC, where they teach people to manage money wisely. She is a financial advisor, money strategist, financial literacy advocate, and a personal finace freelance writer. Contact her at firstname.lastname@example.org to schedule a 30 minute complimentary consultation.