After posting that it’s important to teach your children about finances, I thought I would write an article about how to go about it – and since I don’t have kids of my own, I went to visit a friend who has a teenage boy who is excellent in this area. I figured that he must have spent hours coming up with a plan to have him understand so much about saving and personal finances at such a young age.
“So, can you give me an outline of how you went about teaching him?” I asked.
He laughed. “I never did a thing,” he said.
“Then where did he learn so much?” I asked.
“On his own,” he said and then told me the following story:
Apparently one week his son was complaining about the amount of allowance he was receiving and wanted more. Money was tight and my friend was frustrated and basically blurted out, “If you want more money, you can have whatever you’re able to save this household…”
That was the end of it he thought until his son began coming to him with ways the family could save money and asking for payment when the ideas worked.
“At one point, I ended up paying him $300 for his weekly allowance because of all the areas he was able to trim expenses,” my friend said.
The hardest part? “I had to be willing to expose all our finances to him as he got better and wanted to earn more money. It was a bit embarrassing to see all the places we were wasting money that my son could find.”
Brilliantly simple. Give kids a monetary incentive (especially when they’re in their teenage years and want as much money as they can get) to learn first hand how to save and budget. While it may take a bit more effort on the parent’s part to get something like this started than for my friend, it would be an invaluable lesson for the any child for their entire lives.
As I was thanking my friend for his help and about to leave, we heard a voice from the other room. “Don’t forget to turn off the lights when you’re done in there,” his son reminded. My friend rolled his eyes and I laughed. It was the only time I’ve ever heard a kid reminding their parents to turn off the lights and I guess that in itself says it all.