The Money Tree

My husband and I were talking a few years ago about how to teach our children to be responsible with money. We still haven't figured this out, but we are working on it. Here are a few ideas that we use to help them learn about the value of money and how to make it to a point where they don't have to work unless they want to.

The first step is to teach them how much money they actually have. If they have $10 a week for allowance, how much do they really have?

• $1.00 goes to church (10%)
• $1.00 goes to savings (10%)
• $2.00 goes to taxes (20%)
• $6.00 goes to what they want to spend it on

So actually they don't get $10.00 for allowance, they get $6.00. We wanted to teach them, that first you pay God, because that is where the money comes from. Second you pay yourself, savings. Third you pay taxes, they don't have to worry about this for an allowance, but they will when they get a job. Fourth they have to pay an household bills, if they have borrowed money through the week or asked for a specific product, they have to pay back what they owe and the rest they get to spend.

Second by teaching them to pay God as a child, we are getting them into the habit at an early age so that when they are an adult they will do it willingly and then God can bless them in the way they are entitled.

Thirdly, by teaching them to pay themselves through their savings, it will help them to become comfortable enough that they won't have to work at a job they hate. No matter what the pay is they will be able to work at a job they love. The money they have put into savings is then used to invest and make the money work for them. This can be done through investing in stocks and bonds, or putting it into a savings account that offers interest, now look into the savings accounts before you deposit the money into it, because our local banks only offer .15% interest (yes, the decimal is where it is supposed to be) by researching different banks, we found a bank that is currently offering 6%. So instead of earning $.0015 on a dollar, I will be earning $.06 on the dollar.

My daughter was interested in investing, so we let her research a stock and she ended up buying one share. Before she sold the stock, she had made $5 on a $32 stock. She was excited and she is still researching different stocks to find out any new ones she wants to buy. She looks at stocks for markets she knows something about and buys from those markets.

By teaching them now that they have to pay taxes for the rest of their life, it will be easier for them to learn how to budget their money. They won't just take their gross amount and think they have that much to spend. They will be able to figure out exactly what they have and be able to have a better budget to live off of.

We hope by working with our children now that they won't have to go through the same trials that we went through. We are trying to impart our knowledge at a time when they might listen to use and understand the ramifications of good money handling skills. If this article interested you, then I would recommend a good book that we have read and are having our children read, it is called "The Richest Man In Babylon" by George S. Clason. It breaks down the principles that everyone needs to learn to have your money work for you, not you work for money. It is an easy read and your children will be able to understand it.

I hope this was helpful to everyone. Enjoy your children, they are only teenagers once!

Patti