Lifetime Lesson: Budgeting Money

My wife and I decided when our son, Jake, was about 10 years old that we were going to teach him how to budget money.  We did not want him to experience ”college without food”.  There were times, due to my own mismanagement of money and having way too much fun, that I was left eating ham sandwiches and drinking water every day and night for at a least week.  Not exactly what we wanted for Jake.

We decided to teach him early and hopefully he would be able to manage his money well when he became an adult.  Admirable goal.  This is how we did it.

First, we determined his “work”.  While just giving Jake an “allowance” would have been fine – we wanted him to work for his money just like his parents and everyone else in the world.  We outlined a series of chores to be accomplished every day, including homework, and then “paid” him a monthly amount relative to an 10 year old.  Jake was expected to tithe to his church, buy his school lunch, purchase a little something for himselft throughout the month as a reward, and save.

I remember going to a sporting goods store with Jake about 2 months into our budgeting project.  He needed a new baseball because his went down the street gutter never to be seen again.  Jake took his money that he had saved (about $8) to the store with him very proudly.  I asked a clerk to help him and they discussed the benefits of 3 types of baseball.  One type was the best you could buy.  The next was a “middle of the road” type of ball.  The last was a cheap sawdust ball.  Jake thought for a moment and selected the “middle of the road” ball.  I asked him “why”.  He told me he couldn’t afford the expensive baseball and the saw dust ball was too cheap and wouldn’t last.

We were very surprised to see Jake monitoring his monthly wages and allocating them appropriatly as we’d planned.  The benefits of this were realized immediately:

  • No whinning in the store “I want it” because he knew if he had it, he could spend it.
  • Jake was responsible for his lunch account at school – not us.
  • His homework was getting done.
  • We were teaching our son how to manage money.
  • He saved money.
  • He tithed 10% to his church.
  • He was prioritizing his spending.
Jake and Family

Jake and Family

Jake’s now 17 years old and we’ve been enjoying the way he budgets his money.  Now he’s driving so we had to increase his monthly pay for gas, maintenance, and haircuts – a little money for dating as well.  For this monthly increase, he’s incurred more “work”.

So how is it going with the budgeting lesson?  Last week he announced he was taking his lunch to school because it was less expensive than buying it at the school cafeteria.  He said he needed some extra money because gas prices had increased.   I like that.

 

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Posted by Admin on Jul 23rd, 2010 and filed under Children. You can follow any responses to this entry through the RSS 2.0. You can leave a response by filling following comment form or trackback to this entry from your site

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