Friday, February 12, 2016

Friday, 12 FEB 2016 :: Teaching your kids about money

I recently ordered one of the Dave Ramsey's kits for teaching your children about handling money.  I wanted to read the instruction book and decide if I should keep it as a reference, give it as a gift, or donate it to the local women and children's mission... for reading by the residents.  I want to share my exploration with you.

I didn't learn a lot about handling money while I was growing up.  As a parent with 2 or 3 children, living on Welfare and food stamps forced me to learn a lot of things on my own.  It has caused me to search for ways to do even better, and to find resources to share with others so they won't have to suffer as much.  One of the newest money guides I have heard about is Dave Ramsey and the Financial Peace University program.  It is often presented to church groups and is based on separating your income into spending categories.  Carli Fiorini mentioned as "zero budget" in one of the Republican debates.  The Ramsey program is based on a zero budget, where every dollar is committed to something and has to be spent on that thing... you can't "borrow" from Peter to pay Paul in a zero budget, you do without until you have another paycheck to distribute to your envelope budget.

Dave Ramsey isn't the first to teach about money using the "envelope" system, but he has been the Christian financial guru for several years now.  In secular circles, Suze Orman is a teacher of all things financial.  These are just a two names you might recognize... I am sure there are others, and someone new is rising to the top as we speak.  It seems each generation has to find their own mentors, for everything.

Someday I might order the adult version, but it is in the $100+ range, depending on whether there is a sale, if you are in a group and get a discount, or some other variable.  I did notice that a lot of the Ramsey program options are heading toward internet access and repeat payments for ongoing access, like the rest of internet providers.  You can find out more information about the adult money system at  or  and other links from these two sites.  YouTube has videos to watch under the search term "Dave Ramsey" and possibly "Financial Peace University."

This blog is about and money.

One thing I liked about the Parent's Guide in the Junior edition was the "Ages and Stages" sections.  These appeared in several of the topic areas ::  Working, Spending, Saving, Giving.  Ages and Stages sections had short descriptions of what different aged children could reasonably be expected to do for chores and other related topics.  The Parent's Guide focused on ages 3-5, 6-8, and 9-13.  (In other materials related to the Junior Financial Peace program, available online at, I noticed the age ranges were 3-5, 6-13, and 14+)

One of the great ideas in the kit, for me, was the clear plastic zippered bags that looked like pencil cases you would buy in school supplies, but were the size of paper money. They were labeled with the three main spending categories for kids : GIVE, SAVE, SPEND.  Dave Ramsey feels the clear bags are good for kids to see their money "grow" as they save it.  I think it might be better not to see the actual money and be tempted or get robbed.  :-)  You and your child will have to decide which is the better option for your child.

The Parent's Guide didn't mention whether the clear "envelopes" are hidden or regulated by the parent in any way to keep temptation from becoming too much for the child to deal with.  I suppose it is part of the learning process to let the child suffer through NOT spending.  And the age of the child might make a difference in that decision, too. 

It was interesting to see the recommendation that a child in the 3-5 year range be given their payment for finishing one of their "chores" as soon as it is completed, while the older age groups moved up to a weekly and possibly monthly time frame.  (I don't remember clearly if there was a monthly payment structure, but there was a weekly.)  The size of the chore was also part of the payment size, with little ones gaining 50 cents for a chore so there could be more of them, and older children increasing the size of their responsibility with their age.  I had the thought that three envelopes might do better with three quarters as the payment... or three dimes.... or three nickels.

Saving money is the main cause for me... how to save, how to teach saving, how much to save, how to make it to the saving goal... the list can be long.  In my general quest for budgeting success, I have worked on a percentage basis, mostly because of the tithe percentage.  It seems the best idea.  How much to save changes according to the person you are following. 

Because the tithe is ten percent, it seemed logical to save ten percent... and some advisors recommend this amount.  Others add another ten percent to savings as a separate fund for retirement.  Whatever you decide, the remainder is what you live on.   Your children will be doing the same thing.  GIVING, which is the tithe. SAVING, which is for various things, like an emergency fund for their special needs during the year. And SPENDING, which is also a varied category depending on the age of the child.

One effect of bringing your children into the Dave Ramsey process is that the whole family is achieving their goals together, and kids begin to understand why parents can't buy them something every time they go to the store together.  That would be nice.

Parents are suppose to buy one kit per child because of the envelopes and the chore chart.  I would suggest buying one and deciding if you need to do that.  When I had my kids, living at a welfare and food stamp level, I couldn't seem to find $25 to save each month.  You may be able to create your own accessories for the system.  Chalkboard paint on a wall or the frig can become the chore chart, pencil bags or Kraft mailers can be your envelope system.  It might be worth spending the money to let each child have their own kit.  You can make it a Christmas gift and start the new year with a goal.  Your family will have to decide.

Money is the big deal for all of us, including crafters.  The desire to earn more money may motivate your children to join you in making and selling crafts when they learn the Ramsey program for kids.

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