Good money habits need to be formed at young ages. Kids need to know money does not simply come out of parents’ wallet and it is earned with hard work and accumulated through saving. To teach my children about money and budgeting, we give them opportunities to join us in managing money and to 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 our extra money and use the money for buying something on our wish list. Whenever possible, each person put extra cash (all or a portion) we’ve got from various sources in it.
Last month, I added $12 earned from a store rebate to this foundation; my husband, Roy, donated $40 he got for serving a jury duty. My two children, Andy and Ally, contributed some of the money they earned from doing family chores, walking neighbors’ dogs, and selling home-grown vegetables.
Some months, we save a pretty good amount of money there because of more extra money earned. For instance, I reviewed some grant proposals for an agency in May and got paid $500 for my time. I put 20% of this income to the family foundation. There are also months we do not have much cash to put in the jar, so the foundation does not grow much during those months.
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 Crocs flip flops, Andy’s bubble tea, my floral print apron, and Roy’s donation to St Jude Children Hospital.
We enjoy the saving part as much as the spending part. Hard-earned money makes my children appreciate its value. Through delayed gratification, they learned to manage their impulse and build self-discipline.
Besides, it is such a fun family activity that brings everybody together. As much as I want to be a cool mom, I can’t hide my excitement when it’s my turn to cross out items on my wish list with the help of the Family Foundation money.
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