Budgeting is a tough thing to master, but understanding the value of money is relatively easy. When my son was still a toddler, I was at a seminar where they talked about things that lead to money issues as adults. One of the things they talked about was teaching children the value of money by giving them an allowance.
They talked about keeping the allowance consistent, setting up rules for how much to give, responsibilities that the child must fulfill to earn that week’s allowance like chores or homework, and letting them make their own choices with their money.
It made a lot of sense to me. Even though my son was very little and my daughter was an infant, we started an allowance program with just a dollar a week. As my kids got older, they knew that they had a few dollars in their piggy banks.
They honestly rarely thought about it, until one of them would see an ad on TV or something in the store and beg to get that thing. That’s when I would remind them that they had allowance money and they could use it to buy the thing they want.
It was amazing how quickly they were able to decide whether or not that thing was something they really wanted when it was their own money on the line. Nine times out of ten, they would go from desperately wanting and needing some silly toy or gadget to being fine without it.
The seminar was correct. When making decisions with their own money, my kids made much more thoughtful decisions than when they were getting stuff for free. They actually thought about whether or not that thing they thought they desperately needed was as important to them as they originally thought. After all, their allowance was something they earned not just given to them. We’ll get into more detail on the earning part in another post. Now, they realized that their stuff wasn’t just stuff. It had value.
It was very interesting to see how this developed as they grew older. They saved up for things that they truly wanted like video equipment and gaming consoles. They learned to distinguish between what they truly valued and what was just something they thought they wanted.
They are actually much more responsible with their money decisions than I was at their age.
Check out some of the things about finances that I wish I knew when I was younger.