Managing Money Like a Grown Up

Since the beginning of the school year, Max has had a credit card…..of sorts.  You can’t put your finger on it exactly, because it’s an idea and the source is none other than The Mom and Dad Bank of the Southwest.  It’s a great place to get all of your banking needs met.  I consider this part of his education at home – if we don’t teach him how to manage money, who will, and what better time to start than at age 10?  Any age, really.  That also goes for learning how to sort darks and lights, emptying the dishwasher, how to operate a broom, and how to bathe a dog without hurting yourself while managing to get all of the soap rinsed out.  All important stuff!

I set up a folder and tucked three sheets of paper inside titled:

1.  Max’s “Change-His-Mind-At-the-Last-Second-About-What-He-Is-Wanting-Which-Always-Happens-and-Should-be-Predictable-by-Now” spending account

2.  Max’s Savings Account (once money’s in, it stays in.  No exceptions no matter how much he tries to out-think me.)

3.  Max’s Giving Account

Each week I hang a chore chart in the kitchen and he checks off things when he feels like doing them.  No pressure from me, well at least that’s supposed to be the theory.  Some days I’m not so good about that part.  He gets paid per chore.  Some weeks he is very motivated, others not so much.  Just like his mom, I guess.  On Mondays he adds up what he earned and then he divides it accordingly amongst his accounts.  He has to put a minimum amount into savings and into his giving account first.

Now to the credit card.  I set it up with a $20 limit and 5% straight interest on purchases.  He can’t go over the limit and has thirty days to pay his bill and get it back to a zero balance.  If he didn’t do enough chores to cover his balance, he gets one of those nasty late fees!  We haven’t had to issue the late fee…..yet.  He gets a little cavalier with the idea of credit sometimes and I try not to say anything.  I let the balance do the talking.  Maybe I should raise his interest rate so it would have more oomph?

It’s kind of a fun experiment, for me, anyway.  Max doesn’t particularly like when his balances are low at the very moment he’s convinced he can’t take another sustaining breath without that new Lego set.

With respect to his giving account, when it reaches a balance of $10 or so, he decides where it will go.  Last month he donated to a world food project through the United Nations.

All of this is virtual money because I don’t actually hand him dollar bills.  He just keeps track of his accounts on his sheets of paper (math!) on Mondays.

Just an idea for helping kids manage money.  There are lots of variations on this theme – try some out and see what happens!  It takes a little discipline on your part to stay on top of it, but setting the responsibility squarely on the shoulders of your child isn’t such a bad thing.  You can be available as the money guru, to offer advice and encouragement as needed.  Good luck and may your house be cleaner because of it, too!

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2 Responses

  1. This is a GREAT idea!

  2. Best wishes if you decide to implement something like this – it’s fun! I do have to remind myself to stay on top of it, though, because Max certainly doesn’t :).

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