Money is a Tool – Building Financially Savvy Children
By: Michael Brahmer, CPA, CFP®, Decades Financial, LLC
“Money doesn’t grow on trees.” As a parent, I believe teaching this to our children at an early age is vital for their future financial success. My wife and I utilize the following strategies to help our kids develop a healthy relationship with money, one of many tools needed for their future success.
Chore Challenge – pay an allowance or not? “I want that” is a statement we hear often. We attempted an allowance system but learned it was ineffective and a lot to “manage” beyond our already busy lives. We now have two simple approaches.
“Family jobs” are laundry, dishes, vacuuming, etc. We believe being part of a family is a team effort. Everyone helps with what’s needed to live in the same house together; each having an important role.
For family jobs, no one gets paid. The duties aren’t “jobs” or “chores” but instead everyone (including mom and dad) is responsible for a “zone.” Zones rotate each week giving the opportunity to learn to do duties that aren’t our favorites…aka cleaning toilets. After dinner, each family member spends 5-10 minutes taking care of their assigned zone and then life moves on. Working side by side with our kids not only teaches them ‘how to do the job’ but also provides quality time spent together.
“True jobs” are more time-intensive, and include mowing lawn, shoveling snow, etc. Expectation of payment is set and known that a specific job warrants a specific pay rate. This is how our kids can ‘earn’ money for their wants. Earnings are divided among those who completed the job (if a team effort).
Technology Challenge – teaching self-control? Growing up, I played Nintendo for hours and saved the princess. I felt accomplished and soon my interest waned. Today, I believe some games lack an end goal and deprive our kids the feeling of success of conquering a game. Even without an end goal, our kids want to play the games, and would for countless hours if we let them. After many arguments to ‘get off the tablet’, I stumbled across a ticket system solution in a book I was reading. The system teaches choice, the value of time, and perhaps most importantly, provides them control (within the boundaries we, as parents, established). This strategy softened disagreements over technology use and teaches budgeting skills.
Every week, we hand out 9 tickets to each child. Tickets are worth 20 minutes of tablet time, providing a grand total of 3 hours of technology for the week. Yes, 3 hours, that’s it! Any tickets remaining in their possession at the end of the week can be turned in for $1 each. If all nine tickets are returned, they receive a bonus and earn $10. Our kids now have a choice, play on technology (immediate gratification), or earn money later (delayed gratification). We have added variety as we go to accommodate our unique needs. We also incorporate tech free weeks and simply provide the $10 to ‘enjoy’ on non-tech related experiences.
Now when our children say, “I want that”, we simply remind them of the tools they have to earn funds to buy whatever it may be.
Michael is a CPA, CFP®, Financial Advisor, and co-owner at Decades Financial, LLC. For over 15 years he has helped meet people where they are in life to help get them where they want to be. Whether starting your first career, raising your family, nearing retirement, or already retired, he helps provide financial solutions for all phases of life. Visit decadesfinancial.com to learn more. Michael Brahmer is a Registered Representative offering Securities and Advisory Services through UNITED PLANNERS FINANCIAL SERVICES, Member: FINRA, SIPC. Decades Financial, LLC and United Planners are independent companies.