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Family Money

3 Easy Ways to Teach Kids to Respect Money

Ever since my first babysitting job at age 12, I have been tracking my income. I had a little black ledger that held the date, hours worked and the money made. When I was old enough to get a job, I proudly worked as a hostess at a family friends' restaurant. What began as four hours on a Friday night quickly turned into 12 by the time I went to college. In college, I eagerly found a job on-campus and was lucky enough to come home on breaks to a full-time/part-time position at a local department store. Even before I was being paid $2 an hour to babysit the neighbor's kid, I was walking with my dad to go to the flea market to sell women's shoes on the weekend -- happily being "paid" in penny candy.

budget-savvy-kidsI'm not sure if it was my father's intention to teach me the value of a dollar at an early age or rather to keep me out of trouble in high school, but looking back, I realize that teaching young children about money helps them to understand where money comes from.

The Earn Your Keep System.

At 3-years-old, my son doesn't get an allowance, but earns a sticker for good behavior. When his sticker chart is full, he gets to choose a reward. Whether it is a toy he has been yearning for or a visit to a favorite game room or restaurant, no matter what he chooses, we make such a big deal about it that he exuberantly tells everyone he sees why he received the treat he got. This makes the reward more special.

Try These Practical Ways to Teach Kids to Save.

Earn Your Keep -- Creating a task list gets your children feeling good about accomplishments as they help around the house. They can earn money for tasks completed rather than given an allowance.

Envelope System -- Having an envelope marked "to spend," "to save," to give" shows children where their money goes and makes them want to save.

Keep the Change -- Allowing children to keep the coins from purchases gets them interested in money and forces you to use cash.

The Envelope System.

As he grows up and I am unable to keep the constant stream of commercialism away from him, I can only hope he doesn't break open his piggy bank to buy the newest video game app. Besides having a savings account, he also has the envelope system -- each marked to spend, to save and to give. The envelope system helps him understand he can spend a percentage of his gift money now (allowing for immediate gratification), and the rest must be put into savings with a portion given to charity. It is my hope he will eventually see that buying small insignificant stuff isn't important and he will want to save all his money to buy that "I've-been-waiting-my-whole-life" toy. This method will help him to ask, "Can I afford it?" without taking from his other envelopes.

Keep the Change.

While it is easy to swipe a credit card for purchases, it is important for me to buy things with cash. Using cash is a conscious decision that shows money in and money out, and when it's gone, it's gone. My son gets to keep the change from our errands, reminding me to use cash because he asks for the coins. I now realize that most of my weekly cash allowance is spent on food and entertaining the little guy!

So whether it is cutting coupons, buying second hand or doing without, maintaining the family budget is like a high wire balancing act. We are a frugal family that tows the line and if we misstep, we have our savings as our safety net.

As a parent I hate to say no to my son. I would love to buy him everything he wants now, but what does that teach him? By participating at the register and earning rewards, I am helping him to understand there is just so much money (in the budget), a little bit of patience, and mommy is not made of money.

Nikki Ducas is a budget savvy mom who lives in Fredericksburg where she teaches her 3-year old-son how to respect money.

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