What do you do to teach your kids about being responsible with money? My kids are 10 & 13 and right now they earn money by doing extra work around the house (outside of their normal chores they have as being part of our household) and while we can afford to give them extra things, we limit it to holidays/birthdays and special occasions. (Like when my son who has ADHD and was struggling with grades got on the honor roll 2 quarters in a row we signed him up for the extra marital arts class he'd been asking for) If they want something like a video game or a new build a bear we show them how much it costs and what work they needs to do to earn it.
It's too easy for kids to become entitiled when things come easy. Neither DH nor I had a ton of money growing up and our parents couidn't help us with anything and we're grateful for it as we learned (many times the hard way) how to be responsible. We messed our credit up and had to rebuild and are just now at a place where we have decent credit scores. We want to help our kids get a good start early so they don't lose 10 years of good credit building like we did making mistakes and having to grow from them.
What age do you add more responsibility and teaching? Now that my son is 13, we want to start showing him a bit more but don't want to overwhelm him either.
Any age where they first come in contact with money. I also think they should teach this in High School as part of practical skills young adults need to go out in the world.
I still have my first savings account passbook... it was opened when I was with all of $10.
But that was where I started. Now I'm a thrifty saver who is only part-way through college yet is contributing to my IRA. There are two things I can credit to my father for that put me where I am today:
My parents booted me out at 13 but from 10-13 they taught me one area I still hold on to today: utility bills. I was in charge of setting the thermostat/light switches and if the utility bill was UNDER a certain amount I got to keep the difference.
At 11 I was a fascist about freezing in winter and sweating in summer, lol. And no one needs a light on to go anywhere after 8pm, right?
My daughter is 2.5
Mostly joking, but i've considered using her halloween candy as a replacement for currency. Let her deposit it in my stomach to earn interest. Perhaps allow her to take credit through the year, and garnish her candy the following year for lack of payments.
I think that by the time she is 7 or 8 she will wise up to the credit game and increase her candy score considerable.
We do not usually allow candy in the house. Halloween being the rare exception. Without additional candy income, her credit will be poor.
She might change all of her future money into candy to game the system more.
Unhealthy obsession with sweets?
As for real life finances, I signed her up as an AU on my oldest card. My dad did the same when I was born, and it helped me a bunch during my early 20s. Would have helped more if he had a better knowledge of credit, and helped teach instead of just providing a potential shovel. Also when he died and 7 years passed, my credit took a dip. I must remember not to die prematurely until my daughter is self established.
We will be having a large family gathering at Disney World in 2022, I'm thinking of giving her a Disney gift card as a "credit card", just to see how quickly she spends her available balance. Not being able to buy an additional stuffed animal will be a hard lesson. But important. Plus I'll buy it for her anyway because I am a sap.
My daughter is 2.5
As for real life finances, I signed her up as an AU on my oldest card.
I may be mistaken, but I thought most banks required AU's to be of a certain age? Either way, she has a better report than most 25 year olds! Well done!
I just got my 12 yr old a youth checking and savings combo. I turned off the overdraft so that if the money's not in the account it will just deny the transaction. He's been pretty good about saving his money for what he wants, now he can do it electronically. I think talking to him about what we've been doing to fix/improve our credit and finances has had some affect, showing him how mom and dad "walk the talk". The intent now is to show him how to save his receipts and match them to the bank info to get the real balance and how to calculate compound interest. He's in advanced math classes so it will be easy for him. Your 13 yr old can probably do the interest to with a little help or at least do what most adults do and use a calculator. Both can easily handle the arithmatic of balance checking. As far as credit goes you might try making up a "PLC" parental line of credit - you could probably do an spreadsheet in google docs to figure interest and keep track of "charges" and "payments". Just a thought.