15 October 2017

The Wells Fargo Wagon Is A-Comin'

For the past year, we have diligently worked to help our children learn some basic finance fundamentals, specifically in regards to budgeting and stewardship.  If you are curious to how we've managed this, read on ...

Last January, they opened their own checking accounts.

We have never been a family that paid money for specific chores because we believe that if a chore needs to be done, someone needs to do it.  Immediately.  If the dishwasher is clean, unload it.  If your clothes are dirty, wash them.  If the lawn needs mowed, cut it.  If it needs to be done, no one is getting paid for it.  Therefore, my children have never operated with an 'allowance' system.  However, over the past year, my husband became very convicted about our children having their own money.  If they wanted to see a movie, or grab food, with friends, they needed to be responsible for paying for these events.  Our children needed to have some concept of how much things cost as well as begin breaking the habit of always asking us for money.

Enter the checking accounts.

After some discussion and research, we decided to have our children operate with a monthly stipend plan.  Every month, at the beginning of the month, our children are awarded their stipend.  This is their own money for entertainment, clothes, cell-phone add-ons, toiletries, fast-food, event registrations, gifts for others, etc.  It is not a large amount of money, but it is a significant amount if you're not used to having any.  They add to the amount with any money they earn from odd jobs, babysitting, gifts, etc.  The genius of the plan is that my children now pay for everything they need, or want, independently.  It's beautiful.  My husband and I put 1000 texts on their phone every month for $5, and we have told them that we will pay for the shoes they need for their activities, but that's it.  [Running and dancing require specific expensive shoes frequently.]  Everything else they need, or want, they pay for.

It only took a matter of weeks before my children began to understand money.  They learned that they could save to buy big ticket items.  They learned, sometimes the hard way, that if they spent their money by the 12th of the month, and they were invited to a movie the following week, they would be declining the invitation.  They've learned that Suave hairspray works almost as well as a salon brand, and Walmart athletic pants are almost as good as Adidas.  They've also learned that if they spend a significant amount on Lululemon leggings, they are going to take really, really, really good care of those leggings.  My personal favorite has been when they've attended concerts, or races, or dance competitions, and wanted to buy a t-shirt from the event.  I've simply said, 'It needs to come out of your account.'  Instantly, they stop bothering me about said t-shirt.

They each have their own debit card, which I believe helps with the entire process.  They have access to their accounts online, so they are able to track their spending and balances.  They both have begun learning when they are able to spend and when they need to save.

With this system, our son was able to complete several requirements for his Boy Scout Personal Management merit badge effortlessly.  And, just so you know how well it works, in the first month alone, my husband and I came out over $500 ahead in our personal budget!  Ownership.

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