It is so important to teach children the value of money, especially in these economic times, they need to know this and also it’s great for ourselves as parents to ensure that we also save our money. There seems to be so many gadgets and toys that children want

these days, so much more than when we were kids. I know I’ve felt guilty for working full time and have spent money on them for no reason but my own guilt but this is not teaching them the right values about getting things and about money.

When my eldest child was in Prep, I allowed 1 lunch order per week with the limit of $5 per order. The eldest was allowed to keep the change to spend on whatever they wanted. Then my youngest child started school and I was now handing over $10 per week for both lunch orders. This can add up over the school year.

 

After a little while, I noticed both kids were spending less on the actual lunch order (there was a bare minimum I made them spend to fill them up to ensure that they were getting a lunch). They wanted the change to either save or spend at the canteen on their friends (which also consequently meant more junk food they consumed).

 

This became even more evident when our school went healthy and their choices were decreased significantly because they wanted the junk food. Due to this I decreased the weekly amount to $4.

 

This went on for a few months until the kids decided they really wanted Nintendo DS's (as do most kids). Well, at $200 each I wasn't prepared to just hand over that money for nothing, so I offered them a deal that would allow them to get their toy and teach them a life lesson too.

 

I told them that I will still give them $4 every single week. However, they had to decide if they are going to buy their lunch with that money or save it. They couldn't have it both ways. It was completely their choice each week. Another thing was to also teach them about compound interest (i.e. interest from the bank), so for every $10 they saved, I said that I would add 50cents, we counted the amounts every month and added the extra money in accordingly. On top of this, they had chores which they were paid small amounts for competing them on time (when they were told to do them).

 

I felt that this would not only allow them to gain a certain respect for the money they are given, but teach them that even they could easily save and buy their own high priced toys.

 

It worked a treat. Both kids chose to save most of their money.

 

It took them about 7 months, but they did save their money and they now do have their DS's. I am really proud of them and the system is going to stay in place for the rest of their school years. Importantly, it’s created a huge lesson in money that is a part of their daily lives.