I guess you could call me the Money Mommy. I've been working as a wealth management advisor for the last 13 years. I've seen and dealt with a lot of money. (Hundreds of millions - none of them mine).
But when it comes to teaching my kids the value of a dollar; I struggled at first. What do I tell them? How do I approach the subject?
When my eldest daughter turned 8; she finally asked me for an allowance. I said "great!" and suggested she make a list of chores to do around the house and assign a dollar value beside them. So she did. According to her; making a bed every morning is worth 1 cent. She expects to receive 7 cents at the end of the week. One day she will learn that there is such a thing as minimum wage!
She also declared that her allowance would be saved for College. Is this a sign that she watches too many U.S. television shows? Here in Canada we normally refer to post secondary education as University. But hey; at least I should be grateful she wants to save her money for education. (By the way; she plans to be an author.)
I asked her what she thought our house was worth. She said $1,000. Good guess! This is the same child who declares while food shopping with me; that the raisin bread is on sale this week so we should stock up.
It's obvious that our children don't really know what the value of money is until we teach them. I view this as one of my fundamental jobs as a parent. Schools do not teach financial literacy - yet. (Good news though: it will be included in the Ontario curriculum starting in 2011 for grades 4 through 11.) I have found that the best way to teach my children about money is to talk about it with them. It is not a taboo subject in our household. We discuss how much a car; a pool; or a bag of milk costs. We discuss what to do with our money.
The 3 jars system seems to work best. It's also a great introduction to budgeting. We label three jars for the kids and whenever they receive money; they put some in jar #1 for savings; some in jar #2 for spending; and some in jar #3 for sharing. Yes; #3 is for sharing. If they don't learn charity at a young age; when will they ever learn the meaning of "plenty"?
My proudest money moment this past year was not when I landed the million dollar client; it was when my 8 year old had a book fair at school and asked me if it was ok to use her "sharing" money to buy a book for her 4 year old sister.
If I can teach my children the value of money; while at the same time teaching them that money is NOT a value; then I will have done something right.
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