Teaching Money Management

This came to mind earlier and I thought I’d share something my parents did with me that I think was a great financial teaching tool.

My siblings and I all had a Money Binder with 4 different zipper pouches (the kind that clip into binders that kids put their pencils in).  Each pouch had a label,

Spending, Saving, Tithing, and Giving

Anytime we earned any money, it was separated between the four categories.  10% in tithes, 10% in givings, 20% in savings and the remaining 60% in spending.  We took our tithes pouch to church to place in the offering collection.  Givings could be used for buying gifts for friends or for charities.  Savings was supposed to be held until we were older,  and then we all know what to do with the “spending” category!

It was really a great idea to help us start out life with good money management, something I plan on using with J when he gets a little older.

I do plan for a few modifications since I found few flaws in the system growing up.  1. We worked on the honor system.  While we were learning, mom helped us separate the money.  As we got older she just expected us to continue it on our own.  I can’t say I was always honorable!  There were many times when I grabbed the money out of my savings pocket before we went to the store (since I didn’t have anything left of my spending money!) I was always a bit jealous of my older brother whose saving’s pocket was overflowing while mine had a few measley dollars, if anything! I think I will keep an eye on these folders for a little longer.  Eventually J will be on his own with this, but probably not at 7 years old! 

2.  I don’t remember my parents explaining to me what exactly I was saving for except maybe “for your future”.   I think that’s a little vague for a young child. When we do this with J in the future, I plan on giving him something specific to save for.  To me it needs to be something that will require him to be successful in truly saving his money, but something that he will be able to reap the rewards of within a reasonable amount of time for the age.  A 7 year old saving their money for a year is an accomplishment.  As they get older, I would increase the time that it takes to see the benefits of saving. 

Even with its flaws, I really think it helped my siblings and I learn the basics of money management from the start.  As an adult, it’s quite natural for me to tithe, save, give and of course spend! It’s what I’ve always done ever since my first allowance was handed out.  I think money management is something most adults are really lacking in.  It’s not surprising since there really is so little taught about money management even though it is vital to life.  This is one thing J will be taught in the home!


2 responses to “Teaching Money Management

  1. Amen! — stewardship with money is an important part of Christian living. I always really appreciated that my mom taught me and my sibs a similar money mgmt breakdown…i use it to this day, as well. she helped me to see that money is a both blessing (thus we give back to God) and a tool (for meeting needs of self/others…and a tool for entertainment).

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