Many parents wonder how to teach their children financial responsibility. How
did the children learn to govern money? When do you give them money? Do you give
them the money? Do they get the money from somebody else? Those are big
questions on a lot of parents minds. And I know many parents go back and forth
between "Do you do allowance? Do you not do allowance? Do you pay them for chores?
Do you say no, you live here so you don't get to be paid for chores." What do you do
What's the best way for them to develop a healthy relationship with money so
that they don't have scarcity mentality but they have an abundance mentality. But
then at the same time they respect money and they don't waste money. We want them
to save money. We want them to be philanthropic with their money. Wow, money
is a huge discussion. In this video, we're going to be talking about money and
children. And the best ways that I found to teach children financial
responsibility.
At what age did you start buying your own clothes? I know I was supposed to
start buying my own clothes when I was 12. But for some reason I still kept
manipulating my mom a little bit so that she kept buying them here and there. I
think she felt bad for me or maybe she just really wanted me to look cute or
something like that. And so, for some reason I didn't always buy my own
clothes starting at age 12. But I was supposed to. And honestly, I think there's
wisdom in that. I told my children when they were young, "Oh, right now mom and dad
buy you everything." But when you get to be 12 years old there's so many
wonderful things that are going to happen. You're going to start to become an adult
which means that you will get to not only miss out on trick-or-treating on
Halloween and hand out the candy instead. Because that's one of our family rules.
But you will also get the opportunity to pay for all of your own clothes. Won't
that be great? And when they're little and they love spending money and
spending their own money, they're like, "Yeah, that sounds great."
And so, that's how we start talking to our children in our family about who
gets to buy the clothes. So, when they're 12 years old, they graduate into this
phase of life where if they go to a birthday party, they get to buy the
present for their friend. If they're going to a particular activity like a
movie with friends or to the swimming pool with friends, they get to pay for
themselves. And if they are buying clothes, they get to pay for themselves
too. Of course, we still pay for a roof over their heads and clothes...Nnot
clothes, that's theirs. But food and you know family activities and stuff that we
do together. It's just that if they want anything special for themselves. I'll
tell you what. My children turn into really great planners. I know some people
say, "Who would ask for socks and underwear for Christmas?" My children
would. They would totally ask for socks and underwear for Christmas because they
wouldn't want to pay for it themselves. And so, what they do is on their
birthdays and on Christmas and other holidays or times where they would get
gifts, they'll say, "Oh, mom. I really would like this shirt or this thing." Of course
we get them other things too. But they save those
purchases until those times. Unless they really want something extra at another
time. This teaches them to respect their belongings, to take care of them. They're
not going to get replaced at the drop of a hat.
They decide that they like nice things because they're gonna be picky about what
they get. So, they want nice things but they're going to take care of it. That's
called taking pride in your possession in a good way. Right?
Taking responsibility over what you have. And that's what they learn because they
have to buy it themselves. They also learn a lot of money management. "Hmm, if I
want this shirt but I also came to the store because I wanted to buy this
birthday present for my friend, Susan, do I really have enough money to buy both
of those things or do I feel like I don't want to spend that much money yet?"
Now here's the deal, my children have lots of money. Sometimes
my children have more money in the bank than I do. And it started really
small. Here are 5 things we did to help my children earn money and have a
good attachment to their money that they have. Number one, we decided that we were
always willing to help our children start a business whatever it was. So, one
time, London decided that she wanted to set up a stand. You know how people set
up stands to sell lemonade or something like that. She set up a stand in our
cul-de-sac to sell water. We still laugh about it to this day because I'm like, "Yeah,
sure. Try it. See what happens." So, she set up her water stand. I think she had to
mercy customers probably because she just looked so cute. And she came in and
she said, "Mom, I don't think my business was very successful." And I said, "Oh, you
think? Probably not." Which actually brings me to number 2 which
is you have to be willing to fail too. I knew she was going to fail at selling water
but I allowed her to do it. My husband and I both own businesses. So, I own
teachingself-government.calm, I also had a nonprofit organization. And then he
owns another business, a contracting business of his own. So, we
know what it takes to set up a business. We know you have to be able to fail
sometimes. But we also know that sometimes the most surprising things
turn into the best business opportunities. So, we're willing to allow
our children to try anything and to allow them to fail. We've had a lot of
businesses over the years. Lawn mowing businesses, childcare businesses, kite
making businesses, rock painting businesses. Businesses where we sell all
the junk out of our house and hope for the best. Anyway, we've had lots of
different businesses. And they've learned along the way. But over time, because we
had family businesses, our children started applying for jobs. And we allow
them to apply for jobs. So, they would apply at first to earn money doing extra
chores. So, they would say, "Mom, can I apply for a
job? I would like to earn $5." And I would say, "Oh, yeah. Sure, you can
apply for a job here. I have this job that what you could earn $1 if
you'd like to apply for that. And I have this other job that's a bigger job, you
could earn $4, you could apply for that. And if you wanted to this other
job, you could earn another $2 and you can apply for that as well.
But when you apply, you have to tell me why you want the job, how you plan to do
the job and when you expect to be done with the job. Otherwise I don't know if
I'll hire you." So, they learned, "Okay, I've got to show commitment then if I'm going to
apply for a job." So, they couldn't say, "I don't have any money." Because there's
always an opportunity to earn money. They just had to choose to do the earning of
it themselves. So, anyway, that's how I started. They started applying for jobs
and doing chores around the house. Well, over time, dad's business maybe needed
some fliers passed out somewhere or I needed someone to help package books to
send out. The people who wanted my latest parenting book or something like that.
And so we started paying them peace rate for different things that they would do
if they wanted the job. So, at first, my children all earned 10 cents every time
they put a book into a shipping box to send out to other people. 10 cents. But
they thought it was awesome. Like, "Mom in 10 books, I get a dollar."
They were so amazed by that. They thought it was incredible.
So, let him earn money. Help him figure out ways. Just because you don't have a
ton of money, doesn't mean that they shouldn't get the opportunity to try to
figure out how to earn some. Either from you or from other people in your
community. The third way to teach your children to be financially successful is
to teach them how to work hard. I've always worked with my children. Every day,
we have family work time together. They also have their own tours that they do
together. And then we have other special times especially when it's good weather
where we all work in the yard. Often times, 4 hours a day. So, they
don't complain about work. It's just part of life, they know how to do it. They're
confident with it. If they feel that way about work, then they will earn money.
They will be successful financially. It's the lazy people who always want a quick
fix, "Oh, I just need... I'm just going to start out having passive income and never have
to do any work or something like that." I mean passive income, that's a great
thing but I think a person should learn work first. In fact, even though my
husband and I both have businesses, we always hope that our children will go
and get a job, serving food somewhere at some fast food place. Or doing some
really dirty job cleaning out garbage cans or something. So, that they really
learn the value of work, the value of a dollar and that they can do anything to
earn money. One thing that I think parents are really shortchanging their
children on nowadays is they are not teaching them to work hard. They're not
giving them the nudge to go get that job at the McDonald's or at the the dog
groomer. I groomed dogs in summer when I was in high school scrubbing dogs. I was
the washer. I didn't get to do the fun part. I just washed dogs. They'd bite me.
They'd shake their dark water on me. The whole day long, I wash dogs. That's dirty
business. But I did it and I earned like $1 a dog for this grooming place.
Worth it. Because I learned how to work. And that's what our children need. Number
4 and number 5 has to do with saving. So, first, number 4, save half.
There was a book that my father had me read when I was a young girl called The
Richest Man In Babylon. And he said, "You know, I wish I would have followed this
book earlier." He said, "I'm not the richest parent, but there's no reason that you
can't be." So, he said, "Here you go. Read this book and see if you can be better
at managing money than me and your mother have been." And I was like, "Okay,
good point. They've always been talking about how we don't have that much money
so he's got a point. I think I should read
this book." So, he had all of his children read The Richest Man In Babylon. We've
read it and it talked about saving. Saving certain percentages for different
amounts of things. It mentioned saving 10% to a savings account. And when I
talked to my dad about the savings program invest... Mentioned in the
Richest Man In Babylon, he said, "Nicholeen, you don't have any expenses in your life.
You don't have to budget your money out like it says in that book. I would highly
recommend saving half your money right now. Not just 10%. Save half then you'll
have some money to do something with. In fact, you should always try to save half.
then you'll make sure you make more." I was like, "Good idea, dad." And so, I started
saving half. When I would babysit, I would save half. When I worked at the bakery or
the dog groomer or the veterinary hospital, all the crazy things I did or
when I taught people lessons on the side, those were all things that I would take
the money from and I would save half of that money. By the time I was 18 years
old, I bought my own car. Because I had saved half. I paid for my own college. I
paid for everything myself because I saved half. Now, another saving tip that I
learned in The Richest Man In Babylon is you save 10% for charitable contribution.
We're a religious family and so we paid tithes to our faith. And it was 10
percent that we were supposed to pay. So, I always saved 10%. And it's 10
percent to give away. That's what it is. So, I've taught my children to save
10% to give away to not even think of that money as your own. But think of
it as you giving back to a higher power that has watched over you and bless you
enough that you have that money. Saving 10% and giving it away keeps a person
humble. So, let's do the math. How much money really was i keeping of my own
money and actually using? 40%. And that's what I've taught my children to do too.
And that's why they have so much money in the bank.
They are calculating, "Hmm, I wonder how many months I need to work before I can
fully pay for another year of college or before I can buy this car or whatever it
is." They're frugal, they're smart but when they need a spend, they spend without
blinking an eye. Because they've got the money there. They know the skills. They
can make the purchases with free feeling inside. There are so many life skills
that we can teach our children. Financial responsibility is just one of those life
skills. What about social skills? There is a great video you'll want to watch next
called How To Teach Appropriate Social Skills?