For the month of October I am participating in a 31 day event where bloggers post each day on different topics. I chose the topic of teaching kids about money and finances.
I recently read Raising Financially Confident Kids by Mary Hunt. It is the story of the plan they used with their sons to teach them how to handle finances. Their sons are in their 30s now so the numbers used are about 20 years old but it gives you an idea of how the plan works.
The plan they came up with that when each of their sons started sixth grade they would get a certain amount each month to pay for all extra expenses such as video games, friends birthday party gifts, etc. The starting amount was $50 a month and each year that amount increased but the items they were responsible for also increased. The only stipulation was that they had to put 10% away to give away and 10% into savings.
When their oldest son got the first salary, after taking money out for giving and saving he had $40 left. He then wanted to go to ToysRUs and she was hoping he was buying a gift for a friend, but instead he bought a toy that came to $39.92. That meant he had $0.08 left for the month. It was difficult to not give him any extra money for the month, but by going without things he learned a lesson and the following months he was more careful with his money.
Both of their sons were able to buy their own cars when they were 16 with money they had saved over the years. The way their plan was set up was that the “salary” would be over at the end of the summer after they graduated from high school.
Their sons are now in their 30s but with their savings plans they were both able to purchase homes when they were 25 years old.
The last few chapters have ideas of how to implement the plan with different age groups such as The preschool years, ages 6-9 and ages 10 thru teen.
In addition to teaching their kids about money, they also were more conscious of their own spending. She also figured they probably saved money because they gave their kids a certain amount of money each month that was usually less than the amount they would have given them if they had asked for money throughout the month like they used to.
Debt Proof Living.com was started by Mary Hunt in 1992 when she and her family were getting out of debt.
According to the website its mission is to provide a
plan that equips you with the best ways to get out of debt, a way of life that allows you to live below your means abd a simple approach on how to save, give, and pay off credit card debt.
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