I think I just may have to sue Apple for interfering with my parenting. Just when I think things are going pretty well at home and I have this mom thing down pat, they go ahead and introduce a new iphone. Suddenly my nice, mild-mannered kids are obsessed, and I find myself overcome with incessant whining and negotiating…
"Can I have an iphone, pleeease? But everyone has one! It can be my only Christmas present! I can pay for it!"
Recently I met up with some friends who could relate, and the conversation turned to a larger one about how to teach kids about the value of money. While I’m no parenting expert, here are a few ways to introduce the topic to kids and help them begin to develop good habits around spending:
1) Save, spend, share – As early as elementary school age, kids are old enough to understand the basics of budgeting. I love the idea of teaching them to allocate some of their money toward saving (for bigger ticket items so they begin to understand not only the concept of saving for a rainy day but also about delaying gratification), some toward spending, and some toward sharing (for gifts, charities, etc.). One of my favorite resources is The Moon Jar, a cool bank for young kids that is divided into these three categories and easily teaches them how to budget.
As they get older and enter middle and high school, it’s a good idea to open up their own bank account and begin introducing other concepts such as investing and debt.
2) Kids should make decisions about how to spend their money – As a general rule of thumb, you should allow kids over the ages of 8 to make their own decisions about how to spend the money they receive from allowances, birthdays, gifts, etc. Even if it’s another toy that they don’t need, a book that they’ll finish in 2 minutes, or yes, even an iphone for older kids, you should hold your tongue and try not to pass judgment.
Kids need to start forming their own ideas about their spending preferences -- which may or may not be similar to yours. If they save for weeks for a stuffed animal only to
realize that they didn’t really need it, that’s a priceless lesson that would be harder to teach if you always controlled how they spent.
That’s also true about the saving and sharing end of the equation. While you want to encourage them to save and share, introduce the concepts but then allow them to make some decisions and learn from their own mistakes (or successes!).
3) Money isn’t the only factor – Even with the above tip in mind, remember that you have to decide for yourself and your family what is appropriate and not. Money lessons should not be taught in isolation of other values you are trying to instill in your child.
For example, rather than buying that stuffed animal, let’s say my 10-year old wanted to save her money to buy the new iphone instead. In this case, I would likely put my foot down. In my mind, this has less to do with the price tag than about our other values. Similarly, if my son saved up for an X-box game, there are some I would allow him to buy and others maybe not, regardless of price.
A good test is to ask yourself whether or not you would let your child have something even if it were free. Sometimes taking the money factor out entirely makes the decision clearer.
4) There is another side to the money equation – With all this talk about spending, let’s not forget about the earning part of the equation! Although there is some debate over whether or not allowances should be tied to money, kids as young as 6 are ready to start learning ways that they could earn money on their own.
This can be from household chores, from other types of helpful tasks, or even from entrepreneurial ventures (I loved seeing kids on the beach this summer selling their Rainbow Loom bracelets!). By learning that money is tied to work, you may see them valuing not only the money they earn but also taking pride in the work they do. They also will be likely to save since they are more aware of the work involved in obtaining those dollars (versus having their money solely come from gifts).
5) Live It to Give It – I know, we’ve all heard it before but it’s true. Kids model themselves after you and the best lessons learned – about money or anything else in life – are usually learned by example. If you want your kids to be appreciative, work hard, delay gratification, and all those things we want them to know about money, we can’t just give the advice – we have to live it.
Now, if only there was an app for that!
And, for the record, my high-schooler has an iphone, which she received as a gift, and is contributing to her monthly plan; my 12-year old and 10-year old do not currently have one…yet!
~Jennifer Faherty is a Certified Life Coach, specializing in helping women find their passion and develop a healthy relationship with money. She can be found at www.jenniferfaherty.com or on Twitter @jenniferfaherty. Download her free “Money Zen” guide and get weekly tips on managing your money and creating your best life here.
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