When should children start to learn about managing money? Since financial management is considered a learned behavior, why not learn the right way from the beginning? Being a self-improvement junkie, I thought of a system to help my child learn about dollars and cents.
I have never been a fan of paying children money to help out around the house. We are all a family, and we have to pitch in to makes things go smoothly. When my wife does laundry, I don’t slip her a ten dollar bill, and she doesn’t pay me to mow the lawn. Why should I give my child money to clean his or her room? This teaches him to expect something for going through the motions of life.
Instead, I propose a different avenue. Kids spend a vast majority of their time in school, it is essentially their job from ages 5-18. Why not reward them as such? Whatever allowance you would feel comfortable giving for doing chores direct it to a salary for school.
As time goes on, they will get raises or fines for their efforts. When the report cards come out, treat them like a quarterly evaluation. Give them raises based on their grades. $2 per A, $1 per B, $0.50 per C, nothing for a D and take $1 per F. This will teach them that we get rewarded for our efforts and can’t just skate by. They are going to have to learn this in the corporate world once they graduate; this will be a huge advantage for them.
I even propose to carry this over into the teen years. I would rather my child be focused on her studies than go to school all day and then to work right afterward and neglect homework. If shes chooses to get a job, it will be like having two jobs.
This was just thought up by me while driving home from work one day, and there are many details to work out, but I think you can get a clear picture. Does anyone else have an unique system for teaching young people how to handle money?