Good money habits need to be formed at young ages. Kids need to know money does not come out of parents’ wallet; rather, money is earned with hard work and accumulated because of saving. To teach kids about money and budgeting, we give them opportunities to join us in managing money and provide ideas on saving and spending. One of the activities that we do is to build a family foundation.
The purpose of this foundation is for us to save the extra money and use the money for each family member’s wish items. Whenever possible, Roy and I put extra cash (all or a portion) we’ve got from various sources in it. Last month, I added $10 I got from a store rebate to this foundation; Roy “donated” a $40 he got for serving jury duty. Andrew and Allison put some of the money they earned from doing family chores in the foundation box.
In some months, we may have more money saved there than other months, depending on the extra income. For instance, I reviewed some grant proposals for an agency in May and got paid $500 for my time. I put 10% of this income to the family foundation.
Each month, one or more family members, depending on how well-funded the foundation is, will have a chance to buy something on their wish list with the foundation money. The rule is that it should not exceed $20, and if it is more than that, you have to skip your turn this time in order to make the maximum to $40.
Here are some of the ways we’ve used the foundation money: Ally’s new slippers, Andy’s bubble tea, my long apron, and Roy’s donation to St Jude Children Hospital.
We enjoy the saving part just as much as the spending part. Hard-earned money makes my kids appreciate its value. Besides, it is really a fun family activity. As much as I want to be a cool mom, I am really excited when it’s my turn to cross out items on my wish list with the help of the Family Foundation!
Related articles on teaching kids about money:
- Four Ways to Teach Children about Budgeting
- Teaching Kids about Money: 3 Lessons Learned from Earning Money Shoveling Snow
- Three Things I’ve learned from My Kids about Money