My project to teach my 11 year old about money.

[Skippy]

In an effort to teach my 11 year old daughter the value of a dollar, (I feel that I failed badly to teach my older children), I am going to try a project of making her pay all her bills.

 

This is what I am thinking:

At the start of the month I am going to smooth out all our household utilities and get a good three month average. Once I know for sure how much that is, I am going to chop that into four equal parts. (Number of people currently living at my house.) I will then determine how much 1/4th of the bills are and charge my daughter that sum. I will then continue to “make her pay” her share of everything that is purchased for her, (shoes, dinning out, movie ticket, pop corn at the movie, dvd rental, and so on), plus I will make her responsible for groceries and everything else that could be traced back to her at all.

 

As soon as I have a good idea of how much this really comes to each month, I will then start to pay her with real money just to let her pay me back.

 

What I hope will happen is that this project will cause her to examine more closely the money choices that she makes. I would like her to learn to police herself rather than just me and mom saying yes or no to any purchase that she wants or needs.

 

My hope would be that when she needs a pair of tennis shoes, for example, she would think over the benefit of purchasing a less expensive pair so that she does not blow her budget.

 

What I am struggling with is how to reward her fairly if she was to select the $29.00 shoes vs the $79.00 shoes. This is just one example but really what I mean is that if she was to come in $100.00 below budget I need a fair way to reward her other than just giving her the $100.00 cash.

 

I am only in the start of this project so if anyone has some great ideas feel free to toss them at me. I really do want to do this for her as I feel ashamed that I did not do it so well with the two older kids. I am actually thinking of doing this in a hybrid way with the 20 year old that is still in my house as well but not nearly as through as I want to do it with the 11 year old.

[Kid Cid]

I don't have any kids so I'm just spitballin here, but wouldn't it make more sense to pay her for chores done (i.e. money for work)? You could include incentive such as any additional projects she takes on could be paid above and beyond her salary. She wants those $79 dollar shoes she has to work for them, no exceptions.

 

I like the idea of teaching her the value of money, I just don't think that paying her so that she can pay you back is going to give the right impression. It feels a lot like money for nothing.

[Skippy]

We have always done it that way with all the kids, Kid. It just doesn't seem like it worked real well with teaching the real vaule of money. I see it with the two older kids and I just don't like it. I don't want the third to end up the same way now that I am aware of this problem.

[twiley]

I'm not sure how you would do this but you really need to instill the fear of God in her regarding credit. Teach her about the consequences of buying things she can't afford.

 

Maybe you start her out in debt...say $100 and tack on a weekly APR so she could see what carrying a balance will do and how long it takes for her to pay it off.

 

Just thinking outside the box.

Edited October 21, 2008 by twiley

[Savage Beatings]

1) Get her a copy of one of your credit cards with her own name on it, even though you know that she has no means to pay for anything.

2) If your credit card limit is, say, $5,000 then tell her that her limit is $10,000.

3) When she exceeds that limit, then give her as much money as it takes to cover the bill and all of the overlimit fees and any late fees, etc.

4) Then tell her she should at least consider being more careful next time, and that she should continue to vote for you as her Father.

5) Repeat.

 

[skylive5]

1) Get her a copy of one of your credit cards with her own name on it, even though you know that she has no means to pay for anything.

2) If your credit card limit is, say, $5,000 then tell her that her limit is $10,000.

3) When she exceeds that limit, then give her as much money as it takes to cover the bill and all of the overlimit fees and any late fees, etc.

4) Then tell her she should at least consider being more careful next time, and that she should continue to vote for you as her Father.

5) Repeat.

 

 

 

I like it. But Skippy is pretty much an old stick in the mud when it comes to revolutionary ideas.

[Skippy]

1) Get her a copy of one of your credit cards with her own name on it, even though you know that she has no means to pay for anything.

2) If your credit card limit is, say, $5,000 then tell her that her limit is $10,000.

3) When she exceeds that limit, then give her as much money as it takes to cover the bill and all of the overlimit fees and any late fees, etc.

4) Then tell her she should at least consider being more careful next time, and that she should continue to vote for you as her Father.

5) Repeat.

 

This is why my two older children still vote for me as father of the year. I am now ready to be a "maverick" in my house.

[Savage Beatings]

This is why my two older children still vote for me as father of the year. I am now ready to be a "maverick" in my house.

 

 

And I hope it was clear that I was just having a little fun there... I hope my post doesn't get this thread locked or anything goofy like that. If you think it might, I will gladly delete so that some real ideas can be presented.

[Skippy]

 

And I hope it was clear that I was just having a little fun there... I hope my post doesn't get this thread locked or anything goofy like that. If you think it might, I will gladly delete so that some real ideas can be presented.

No way will that get it locked. Leave it alone and I am used to sorting through a thread to find anything of any use.

[Kid Cid]

We have always done it that way with all the kids, Kid. It just doesn't seem like it worked real well with teaching the real vaule of money. I see it with the two older kids and I just don't like it. I don't want the third to end up the same way now that I am aware of this problem.

So I have to ask, were exceptions made to the "if you can't afford it, you can't buy it rule?" I know it must be tough with every other kid on the block having a playstation or cell phone or nitendo gadget, to say no.

 

BTW, twiley's idea of teaching about savings and credit is good too.

[Big Country]

My son who turned 4 got hisfirst lesson. He wanted desperately to get a supe big stuffed Shamu at SeaWorld, and we made him use his birthday money on it. Then, when he asked for some other big thing at the zoo, I told him no as he had used all of his money on the Shamu. Granted, he is only 4, but hoping that doing things like this will lay the foundation that you can;t have everything just because you want it.

 

When it comes time for an allowance, I plan to try instill the saving mentality by pretty much offering the kids a chance to get more ala a 401K. They can get all of their allowance immediately, or, if they so choose, they can let me put some or all of it into savings with a match from me but then they can't spend it or access it until they are 18 or 21 or so. Hopefully this will lay the groundwork of saving, etc.

 

The biggest challenge will be following through with this.

[Czarina]

I have never liked the idea of tying household chores to money, as there are things that must be done in a family to make it function. Nobody in the family gets paid for doing those types of things. You run the risk of having kids avoiding some things and questioning, "How much do I get if I do ____?" I find that irritating.

 

On the other hand, I have been willing to designate certain other "above and beyond" types jobs as money-worthy. If one of my kids is feeling he needs cash, I get some extra stuff done around here (like my car cleaned out and vacuumed, etc.) So called 'bonus' jobs aren't available if the regular stuff isn't done.

[Puddy]

I got my daughter a stocking stuffer book to teach younger girls about money last Christmas or the year before. It was geared toward your daughter's age group. I'll get the name of it when I get home tomorrow and let you know. It may be a decent start just to familiarize her with it before putting an action plan together.

[TimC]

Whatever happened to the kid getting a job at 11 years old? I was tossing afternoon newspapers on my bike. Ooops, no more afternoon newspapers, huh? Oh, and no more riding bikes around the neighborhood either?

 

I got nothing. Tell her to marry a rich guy and have fun in life.

[gsmayes]

Whatever happened to the kid getting a job at 11 years old? I was tossing afternoon newspapers on my bike. Ooops, no more afternoon newspapers, huh? Oh, and no more riding bikes around the neighborhood either?

 

I got nothing. Tell her to marry a rich guy and have fun in life.

 

pfft...I was delivering a daily *morning* newspaper in 5th and 6th grade.

Edited October 22, 2008 by gsmayes

[wirehairman]

My cousin has taken a unique approach with his kids, which may be over the top but is a good concept. His children each get an allowance equal to $1 per year old they are every two weeks. 10% comes of the top for a tithe to the church. The rest gets put into three "banking accounts" he keeps for them (envelopes in his dresser drawer). One is discretionary spending (i.e. movies, candy, etc.). The next is a short term savings (i.e. a fairly expensive toy or game they want). The last is long term savings (i.e. a car in high school or college). I believe the kids are required to put at least 20% of their allowance into each of the savings accounts but can distribute the remaining 60% however they wish.

 

It is interesting how the three different children handle it. His oldest daughter spends every cent as soon as she can and then has to suffer being broke all the time. The middle child, his son, has turned into a miser and doesn't spend a dime and regularly has a large wad available. The youngest girl pretty much splits her money in equal parts for each account and seems to be the most balanced about her spending.

 

Anyway, its' some food for thought.

[TimC]

His oldest daughter spends every cent as soon as she can and then has to suffer being broke all the time. The middle child, his son, has turned into a miser and doesn't spend a dime and regularly has a large wad available. The youngest girl pretty much splits her money in equal parts for each account and seems to be the most balanced about her spending.

 

Anyway, its' some food for thought.

 

Which proves the point that wimmin know some guy is going to take care of them. Don't it? The young girl will figure this out soon enough.

[muck]

My daughter is a good spender, but seems very business minded. We'll see where this goes...

 

My oldest son (2nd born) will do anything to make money (and will save the money) if its explained to him that the next time we go to a restaurant with video games, he can spend the money he earned on the games. He'll routinely earn $2 and then save $1, using the rest on video games. It's not uncommon for him to lend money to his big sister. When he gets older, both of them will begin to learn about fun ideas like "collateral" and "interest" and "default" and "foreclosure".

 

I can just imagine:

 

Her: "Can I borrow $5 for the ________."

Him: "Sure. I'll buy it and hold it as collateral. You must pay me back in one week, or I'll start charging interest at $0.10 / month."

Her: "Ok."

Him: "If you don't pay me the full amount by the end of the month, I'm going to list it on eBay and sell it. If there is a shortfall, you will still owe me that, plus interest."

Her: "Ok."

.....

Her: "Here's your money."

Him: "I sold your _______ two weeks ago when you didn't pay me. Here's your change back after I take the principal and interest you owed me. Thanks for doing business. Dad, can we go play video games?"

Her: "HEY! That's not fair!!"

......

Me: "Sure it is. You borrowed money and you didn't repay it. You lost your _______, plus owed additional money because of it. And, sure, son ... how about lunch on Saturday?"

Son: "Sounds good, dad."

Her: :weep:

[Jimmy Neutron]

One thing I've liked to do with my kids as they develop an understanding of the value of cash - I take them with me to the bank and withdraw cash for the mortgage and let them hold the cash on the way to the other bank to make the payment. They've looked at me and looked at the cash and you can just see the, "I could buy a lot of _____ with all of this money" on their face.

 

When I ask for the cash and hand it over to the other bank and tell them that's how we pay for our home every month, the gravity of what things cost starts to sink in a little.

[muck]

One thing I've liked to do with my kids as they develop an understanding of the value of cash - I take them with me to the bank and withdraw cash for the mortgage and let them hold the cash on the way to the other bank to make the payment. They've looked at me and looked at the cash and you can just see the, "I could buy a lot of _____ with all of this money" on their face.

 

When I ask for the cash and hand it over to the other bank and tell them that's how we pay for our home every month, the gravity of what things cost starts to sink in a little.

 

That is a great idea.

[Puddy]

I got my daughter a stocking stuffer book to teach younger girls about money last Christmas or the year before. It was geared toward your daughter's age group. I'll get the name of it when I get home tomorrow and let you know. It may be a decent start just to familiarize her with it before putting an action plan together.

 

A Smart Girl's Guide To Money This is by American Girl and is targeted right to your daughter's age.

 

I got home and asked my daughter about the book and she said..."make sure to tell him that his daughter is going to want to start her own business just like I did when I finished". She had a grandiose idea of selling Valentine Love Boxes after reading it.

 

Look's like they have a few activities on their website related to the book as well.

[Skippy]

A Smart Girl's Guide To Money This is by American Girl and is targeted right to your daughter's age.

 

I got home and asked my daughter about the book and she said..."make sure to tell him that his daughter is going to want to start her own business just like I did when I finished". She had a grandiose idea of selling Valentine Love Boxes after reading it.

 

Look's like they have a few activities on their website related to the book as well.

Thanks Puddy! I will be out to get the book over the weekend.

[Skippy]

One thing I've liked to do with my kids as they develop an understanding of the value of cash - I take them with me to the bank and withdraw cash for the mortgage and let them hold the cash on the way to the other bank to make the payment. They've looked at me and looked at the cash and you can just see the, "I could buy a lot of _____ with all of this money" on their face.

 

When I ask for the cash and hand it over to the other bank and tell them that's how we pay for our home every month, the gravity of what things cost starts to sink in a little.

I like this. I guess I can do the same sort of thing by just showing her the bills and letting her help me pay them.

[Ziachild007]

Cool idea Skip. My daughter is turning 8 next month, but I would like to give her a headstart on learning about money as well. No one ever taught me when I was a young 'un and I had to end up learning the hard way. Luckily I learned in my early 20s and fortunately was able to recover OK. But if I can save them from having to do that it would be worth it.

 

Don't have any ideas right now, but let me think about. for you for a great idea, though.