Have you ever had your toddler throw a hissy fit in a store because they see something that catches their eye and they want it? What about a pre-teen/teen asking for money for things or to go out with their friends? OR a teenager needing money for all kinds of activities and outings? What’s a parent to do? Become a human ATM, handing out cash whenever Joey or Suzie wants something? Not to mention the confusion of whether we as parents should be funding all of our teenagers outings…
What if you could help your kids develop a strong work ethic and financial character, while alleviating their sense of entitlement, as well as halt the parental ATM syndrome? (Yes!!)
Much of What We Know as Adults We Learned as Kids
Have you ever heard of the book All I Really Need to Know I Learned in Kindergarten? Well, much of what we know as adults with regard to finances, we learned as kids. Hmmmm….
So what if you could not only reprogram entitled “bratty” kids, but you could help your kids avoid most of the financial pitfalls that plague so many once they reach adulthood?
What I’m proposing (and have done with my own kids since the year 2000) is to intentionally focus on what our kids really need rather than what they want. Of course you’re going to give your kids the tangible stuff that they need: food, clothes, housing… but what I’m really talking about is a mindset and the tools that will benefit them over their lifetime.
One of the things I believe kids need is to understand the tie between hard work and money – more specifically the value of hard work and how to manage their corresponding finances wisely.
“If you want children to keep their feet on the ground, put some responsibility on their shoulders” ~ Abigail Van Buren (Dear Abby)
THE VALUE OF OUR KIDS’ HARD WORK
The first step in developing your kids’ work and financial character is giving your kids some age-appropriate work to do, even from a young age. At first don’t focus on quality but just on completing the job, especially with a good attitude. Give them a “good job!” and continued opportunities to learn how to be more effective at the task, thus increasing the quality even without comments from the parent. At some point, the parent might want to gently give some tips on how to improve quality, but let the child take ownership and responsibility for it for a bit before commenting.
There are so many lessons to be learned through working, such as: dignity in a job well done, trust & responsibility, how to follow directions, how to meet and exceed expectations, how to manage time, how to communicate with others in a mature way (boss, co-workers, etc…), how to accept constructive feedback or praise for job performance, etc…
It also helps kids see how they are part of a community like a family or a team in a company, whether they’re washing windows at home or dishes at a restaurant, setting the table at home or waiting tables at a diner, mowing the family lawn or landscaping with a company.
When they’re old enough to work outside the home, even if it’s dog-walking or baby-sitting at age 12, they’ll learn increased responsibility and independence.
Hard work is part of the antidote to entitlement, but additionally the tie between hard work and some form of payment helps give kids a sense of ownership, responsibility, and accountability. Intentionally training our kids to manage their money is the 2nd part to this equation of shifting our kids from a sense of entitlement.
“For the harder I work, the more I live. “ George Bernard Shaw
PAYMENT FOR WORK OPTIONS
Giving your kids an “allowance” just because they’re part of the family and not having it tied to work doesn’t represent reality. It’s similar to being a parental ATM except that perhaps they now have to manage the money that they’ve been given. And while that’s a start, they miss the lessons, skills, and character development of working to earn the money. It can actually reduce their confidence, promote dependency, and rob them of their personal dignity.
What kids learn now will stick with them as adults.
There are numerous methods for helping kids earn money for work. Check out the following:
I’ll dive more deeply into these in another post, but suffice it to say, that payment for work helps our kids understand the value of hard work, and because it develops character and skills that are life-giving, it sets them up for greater success for the rest of their lives.
Now I’m not saying that kids need to be paid for every task they do at home, and I’m not saying that there won’t be times that they volunteer in the community without being paid, but this discussion is specifically about being intentional about setting our kids up for success in the area of working hard, being paid accordingly, and in managing their resulting finances.
Parents – what an awesome privilege we have to break the pattern of financial bondage that is “normal” in America, not only by you yourselves getting on the road to financial health, but in teaching your kids how to become financially savvy from a young age, so they never have to experience what is so typical in our society.
Helping parents raise financially wise kids is one of the main missions of my business and my life! Why? Because in helping adults for the past 10 years get their own personal finances in order, I’ve seen the devastation that financial bondage and turmoil can create in families. But I’ve also worked with kids 7-18 and have helped set them up for financial health, hope, and freedom as they enter adulthood.
Parents who help their kids develop personal finance know-how, especially when the money they receive is tied to work, can accomplish the following:
“We’re not trying to raise good kids. We’re trying to raise kids who become great adults.” Andy Andrews
Here’s a summary of what our family did to help develop financial know-how in our kids.
When our kids were 3 and 7 years old, my husband and I joined a parenting book group, reading one of Dr. Kevin Leman’s parenting books (Becoming the Parent God Wants You To Be). Among other takeaways, we latched onto the concepts of being intentional with chores and paying our children an allowance based on their age per week (we started at age 7). Yup! We thought that was a lot of money for a young child, but there was more to it. They didn’t get access to all of the money to do as they pleased; there was structure attached and purposeful lessons to be learned.
Throughout the years, the girls had chores to do (typically a 15-20 minute chore each schoolday (since we homeschooled they did this right after Bible study and before breakfast)), and the allowance they received was kind of like a salary. Their money was broken up into 4 “buckets” (that’s what we called them, but you could use jars, envelopes, shoeboxes, etc… CLEAR is best). We started with cash but then moved to actual bank accounts because managing the cash was a bit cumbersome. Using cash would have been better because of the tactile sense and emotion attached to real money. We however managed all of the money via bank accounts and only used real money when the kids wanted to spend it. The 4 “buckets” that we used were as follows:
The 4 “buckets” that we used were as follows:
GIVING – this account was used for charitable contributions and good stewardship to church, ministries that the girls were interested in, and for mission trips that they took.
SPENDABLE - this account was used for things that Mom & Dad wouldn’t pay for. The kids learned GREAT lessons in patience, responsibility, opportunity cost (choosing priorities for their money), etc… We always called this "Spendable", but it was really a SAVE/SPEND account, because oftentimes they were saving for something specific.
COLLEGE - this account was for the 30% that our kids had to pay for their college. At a state school of $28k a year, that’s $8,400/year for them. Even with the money saved in this bucket/account, this was quite an undertaking, yet they both still did it and came out of college debt free. Much more to share on this.
LONG-TERM/CAR - this account was for the kids to buy their own car at age 21. We had told them from the beginning that we would match this fund UP TO $5000 when it came time to purchase their car. So when the oldest turned 21, she made sure her long-term savings had at least $5000, which then meant with our match, she had $10,000 to spend on a car. She bought a used 2002 Honda Accord and had a little work done on it all for under $6,000. She used this account to then help cover auto insurance, maintenance, vehicle taxes…
The girls also had their own businesses as they got older, and they continued to split up their earnings into these 4 buckets (bank accounts). I mentored them on starting their businesses, and one business concept was so good that my younger daughter ran the business (with support from me) every summer for 3 summers from age 14 to 16. Each year, she took on more and more responsibility, which freed me up. I have lots of lessons about the skills and character development gained with this endeavor and all of the entrepreneurial endeavors.
There is SOOOOO much more to this story, including the confidence, responsibility, reliability, generosity, and freedom the girls gained through all of this experience. I encourage parents to be intentional about this training with their own kids so they become financially wise and savvy from a young age. By teaching them early, you’ll instill good financial habits that they’ll take with them into life so they can avoid the financial pitfalls that so many fall into.
JOIN OUR FACEBOOK GROUP: To find out more and to join the conversations, please join our Facebook Group called Kataltyic Kids https://www.facebook.com/groups/KatalyticKids where we talk more about ways to raise financially wise kids from a young age and develop Godly character as part of that.
MASTERMIND: Also, be on the lookout for my Mastermind class on this subject, including interviews with other parents on finances and entrepreneurship with their kids, interviews with my own adult daughters, and input from some of the “experts” out there.
COACHING: In the meantime, feel free to reach out to me at www.katalytic.net for a complimentary 30 minute coaching conversation to discuss your current personal finance situation and future goals, and to see how I might be able to serve you. I would love to help!
As a certified Personal Finance coach and an award winning Personal Finance Educator, Kathleen serves others through coaching and both online and in-person Financial-based Masterminds. She works with people of all ages, but her passion is to help young adults take control of their finances early and get on a path to Financial Hope & Freedom so they can live into their passions and purpose. Additionally she helps parents provide their children training and experience to become financially savvy and character-driven from a young age so that they avoid common financial pitfalls in their adult years.