10 tips for raising financially responsible children

1. Money is not for nothing. An important life lesson is: no work – no pay. That is why in our house there is no such thing as an allowance. There is however a myriad of ways to earn money. We have set chores like empting the dishwasher, practicing her guitar and making the bed which are .25 a chore and then there are chores like mowing the lawn that require more time and effort so they earn a higher fee.

2. Keeping Track. On the refrigerator is a chore chart where our daughter keeps track of what she has done. At the end of the week, she is responsible for adding up her chores and submitting a balance due. This not only teaches responsibility but makes for a great math lesson.

3. Just life. Our daughter doesn’t get paid for everything. Just like life, there are some things you just have to do because they are your responsibility. For example, in our house one of the things you just have to do is put your clothes away after they have been laundered. Also, in any given day I’ll ask my daughter to do something and she will have to do it because I said so.

4. Attitude and Kindness. Sometimes my daughter gets paid because she did something without complaining or she showed someone kindness. While I believe that a good attitude and kindness have intrinsic value, catching your child doing something right is a powerful behavior modifier.

5. Working with a budget. Before you rush out of the store to buy new shoes for your child, talk about what the budget is. If you get to the store and all of the shoes are more than your budget, talk about how you misjudged the price of shoes. If you are willing to pay more for a certain feature, talk about the thought process that went into that decision. Or, maybe you are unwilling to pay more. Why did you come to that conclusion? When children hear your thought process, they begin to establish good buying practices for themselves. Do they want one expensive shirt or two less expensive shirts? Allowing them to make this decision empowers them and makes them better stewards of money. Sometimes they learn more from making bad buys than good. So allow them to make a mistake now and again.

6. Researching Prices. Having an idea about what the going rate for something is a good idea but even more important when your child wants to purchase a big ticket item. Help them research how much a product is, compare and contract features and look for sales. Making a child research an item creates built-in delayed gratification and side steps impulse buying.

7. 50/50 Split. Make big ticket items more attainable by offering to split the cost. At .25 a chore, the purchase of an iPod can seem unattainable. Saving for big ticket items helps your child set and achieve longer term goals and is an important part of financial responsibility.

8. Making up the Difference. My daughter wanted a pair of expensive tennis shoes. My budget for the purchase of her shoes was $30 but the ones she wanted were $70. The solution, she would have to make up the difference. I thought maybe the time it would take to earn the difference may cool her interest in the shoes. I was wrong and she did purchase the shoes. But, by the time she had the money, she knew exactly how much she needed and what pair she wanted.

9. Saving. No article about financial responsibility would be complete without covering saving. No matter what our daughter is saving her money for, half of what she earns goes in her savings account. And it is her savings account with a passbook that she keeps track of by preparing the deposit slip and filling out the passbook tallying her account balance.

10. Sharing. Whether you believe in tithing or charitable giving, it is never too early to teach your children the importance of being a charitable member of society. We plan some type of giving on a quarterly basis. We don’t limit our giving to cash. I routinely have my daughter go through her toys and clothes looking for items she has outgrown to give to charitable organizations. My daughter is a singer/guitar player and often performs at charitable events. To really understand the value of giving, it is important to give of yourself as well as the money you earn.