April is Financial Literacy month. Although there are lots of wonderful posts on teaching our children how to manage money, sometimes we as parents need a reality check as well. We spend countless hours worrying and researching the biggest purchases in our life, when our biggest investment(s) are busy building block towers and eating Cheerios just a few feet away.
According to a 2011 USDA Report, it costs $295,000 to raise one child from birth to age 17. I don’t know about you, but this is crazy. Factor in the cost of college, and the total figure might be enough to give most of us a coronary.
Instead of panicking, however, we must be wise stewards of our investments and make conscious decisions that benefit the entire family.
Gregg Murset, a Certified Financial Planner and the founder of My Job Chart, shares 5 ways to make the most of our biggest (and sweetest) investment(s).
1. “Make our kids aware.” As we raise our children, we must involve them in our financial landscape. Sharing the price of bills and everyday expenses allows them to have a realistic picture of what things actually cost. If you have regular budget meetings, invite your child(ren) to attend.
2. “Share on big-ticket items.” Once your children are older, share information about your home’s value and other big-ticket purchases. Once older children are aware of how much money it costs to run a family, they are much more likely to make smarter money decisions.
3. “Help your kids enjoy work and money.” Our family has adopted a “commission system” where our children have some daily tasks that they are responsible for as being a member of our family and others with which they can earn a commission. Big Brother receives $2.25 each week and Little Brother receives $1.10. We also have 3 coin bags for each child: Save It, Spend It, and Give It. Each week, they divvy up their money into each of the bags. This has been an excellent way for them to learn the value of their money. They can either buy 1 slushy at Sonic for the entire week or they can use that money for something longer lasting. Big Brother has also been paid additional money for helping with big projects around the house. Last weekend, he spent 2 hours helping my husband spread mulch around our yard (even using his own wheelbarrow). He has definitely learned to enjoy work and money!
4. “Don’t cultivate entitlement, tie work to reward.” The word “entitlement” is a dirty word in my book. In the real world, if you don’t work, you don’t get paid. If you don’t get paid, you can’t meet your own needs, let alone desires. Children need to equate money/things with work. As parents, we want to give to our children. But we must not deprive them of the valuable opportunity to work to get those things themselves. It is a lifelong lesson, for parents and children alike!
5. “Consistency Counts.” Whatever system you choose to adopt, stick with it. I have been guilty of starting and stopping allowance/commissions in the past, although I think we finally have a good system in place (that I can remember).
Check out this informative infographic below:
Be sure to check out more tips from My Job Chart!
*Disclosure: I was compensated from My Job Chart for sharing this post.