Thursday, September 30, 2010

money matters

A couple weeks ago after Max had begged and begged for me to take him to get a new volleyball (he's in this new whiz-bang volleyball club thing and he adores it), we hopped in the car with plans to go purchase a volleyball while the girls were at gymnastics.

Max's smile stretched wide across his face. It was contagious and spread to me too. I was going to get him all to myself for a little while. And I was was so excited that he was so excited about volleyball.

As the girls were shuffling into the car I leaned over and asked him if he had his money.

"What?" he asked, purely confused.

"Well, we're going to buy a volleyball, right? Don't you need money?" I replied.

His face fell as the realization hit him that he had to contribute to this thing he wanted so badly. I wasn't just going to hand it to him on a silver platter. Suddenly going right that minute to get that ball wasn't quite such a matter of life or death after all. You see, I don't know that that boy had any money. And as tough as it was to not get that ball after all that day, I hope so much that little things like that will help him realize he needs to save like the dickens (since talking about it 'til we're blue in the face doesn't seem to do the trick).

Now, let me tell you, Max is a good kid. I don't mean to single him out because most of our other kids have had instances similar to that one, this just happened to occur most recently and it hit me again what an important job we have as parents to train our kids to handle money responsibly.

...and how we have a lot to learn.

Dave and I both have families who had their own good methods of dealing with money, and we've tried to incorporate the best of both systems into our family.

We don't believe in paying kids to do jobs at home. We think it's important for kids to realize that as part of a family everyone does their share to help out.

But we DO believe in teaching kids to 1) work hard, and 2) manage money, and the importance of SAVING as part of that managing.

So Dave and I decided long ago that in order for our kids to learn to manage money they would get a small allowance (their age doubled once a month), and that they'd have to earn money other ways to supplement that if they needed extra.

Now, when allowance is given, we have a very strict rule to help our kids manage it. We adopted it from my family and it's called the 10-20-70 rule. Growing up in my house it was introduced from the time we were tiny, and was talked about incessantly by my Dad until we all started to roll our eyes when we could tell the schpeal was coming, again.

And I am SO glad for all those schpeals.

The rule is that when money is earned, ten percent goes to tithing to our church (giving money helps so much to remember that in the whole scheme of things it's really not our money in the first place), twenty percent goes to savings, and the remaining seventy is used for living. Period. There are no if's, and's or but's about that one.

My Dad was great about being the "banker" of the "First Bank of Eyrealm" each Saturday when we had "Pay Day." (We had an elaborate system of earning money you can read about here and you can watch the awesome video my Dad made about it here.) We would keep track of our earnings and figure out how much to give for savings and tithing etc. We were completely motivated to save because that bank of ours gave out some serious interest. Ten percent each quarter to be exact. And I for one was pretty excited to see that the more money I put in that savings account, the more it grew.

Well, Dave and I inherited that Eyrealm bank (a wooden chest spray painted gold with a padlock on the front) and although we don't do it every week, Dave is a pretty good banker himself when he gets around to it.

If our kids go somewhere with their friends they pay for it themselves (once they are old enough to go places with their friends without us). If we go somewhere as a family, we pay. We pay for clothes too (growing up we had to pay for clothes from the time we were eight-years-old...Dave wasn't hip with that idea because he had mortified visions of our children...one of them in particular...wearing rags to school because they didn't care enough about earning the money to get decent stuff). But if they want some brand-name thing that is more expensive than the regular stuff, they chip in.

Recently inspired by the Parenting Breakthrough I talked about here, Dave and I decided that after our kids turn twelve they no longer receive an allowance. At twelve we feel like we'd almost be doing them a disservice to keep paying them. They really can earn their own money. Max mows our neighbor's lawn and works hard as our pool boy (yes, we pay him for that). Elle babysits and occasionally does her own photo shoots. Hopefully this will help them learn to save and work harder as a result of having that allowance slip away from them.

I know it sounds mean, but I hope they'll struggle a bit through this adjustment. I think it's even tougher for me than it is for them to not be able to join their friends for fun things because they haven't saved their money. But hopefully it'll help them learn the importance of money and working hard.

Dave and I are in the midst of trying to figure out whether to help pay for college, missions, etc. So many things to think about (and I'd love any input in any sort of money ideas...I know there are so many good ones out there).

The point is, money education is so very important. Saving is so very important. Oh how I hope we can help these kids to get that down pat before they leave the confines of our little safe-haven at home.
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