Children can become master manipulators finding ways to get you to pay for what they want. It starts as early kindergarten (sometimes sooner) barraging you for candy at the checkout counter (what mother hasn’t given in to that pressure), or perhaps it’s the latest and greatest toy (that typically keeps their interest for a week) or the latest fashion created by a rock star (that often has less material then most parents consider decent with 3x the price tag).
As a parent this constant pressure can become overwhelming creating a sort of entitlement syndrome or a state of affluenza in our children setting them up for financial failure. The key to helping kids learn how to manage their money effectively is helping them understand the difference between what they NEED and WANT and then managing their money accordingly. Here is a simple program that can simplify your life, reduce the constant pressure and teach your children a lifelong lesson:
- Use school lunches as the basis to their monthly allowance, if it costs $4.00 a day for a hot lunch establish their monthly allowance at $80.00. $80.00 may seem like a lot but trust me we often spend more due to a lack of budget. They can choose to use this money on hot lunch, or bring a lunch and save the money for other things they WANT, like fun clothes, movies with friends, ice cream etc…. the choice is theirs.
- Open a checking account/savings account that gives them access to the ATM machine. Let them know that $40.00 will be deposited into the account on the 1st and 15th of each month and be consistent with the deposits if you want this to work.
- Clarify what is a NEED and what is a WANT. Food on the table, books and necessary school supplies, basic clothing are needs while designer clothing, a must have skate board or pizza parties is a WANT.
- Stay firm in your stance as to what they NEED and allow them to run out of money from time to time, even when it’s a special opportunity and they have no funds left you are NOT in the business of lending.
While you may hear a few complaints from time to time, like “John’s parent’s pay for everything!” Make sure to hold your ground, as your children will learn valuable management skills that will have a positive impact on the rest of their lives.