If you’ve been following me for a while, you know that I’m a huge fan of Dave Ramsey – like total fangirl huge. And so, it’ll probably come as no surprise to you that when it comes to teaching our boys (ages 4 and 3) about money that we’re using Dave’s Financial Peace Junior program. 

And since, I know many of y’all are wondering how to teach your kiddos to manage money, I thought I’d share with you our process and how we’re using Financial Peace Jr. to help us. 

Commission not Allowance

I’m a firm believer in the commission system versus the allowance system. Basically with the commission system, your kids are doing chores that are worth “XYZ” amount as well as some chores they’re just expected to do because they live under your roof. 

Now, there’s a zillion arguments out there on the best chores to pick and how much they should be, but honestly you just need to pick what works best for your family and of course, your budget. For our boys, they just get paid in change which typically comes from my husband’s overflowing change jar. 

But I know that as they get older we’ll have to up our game to using greenbacks. 

Chores Based on Your Kiddos

Here’s the thing, everyone and their grandmama wants to compare how they’re doing things to how those around them are doing them. Please DO NOT DO THIS!

Seriously, you pick what works best for your family and ignore everyone else. Now, with that said I do know that many parents struggle with figuring out age-appropriate chores for their kids because it seems like some kids can clean better than most while many don’t do enough. 

So, you may have to do a little bit of trial and error until you figure out what your kids can do well. 

Focus on Effort not Perfection

We as parents have to understand that our kids aren’t going to do things like we would. For example, my kids don’t make their beds nearly as neat and tidy as I’d like them too, but they’re 4 and 3 so the way they make their beds is actually great for their ages. We just have to focus on the effort and not the perfection. 

If you focus too much on them “doing it right” they’ll eventually not do it at all. Because who wants to feel like a failure all the time? Not me and certainly our kiddos don’t. 

What to Pay for and What Not to Pay for

Okay, so this is one that I get all the time – what do I pay my kids for doing and what don’t I pay them for doing? Once again, this is entirely up to you. 

We pay our boys for making their beds but my brother and sister-in-law don’t pay my 4 year old nephew to make his bed because he does it without being prompted. Is our way right and my brother’s way wrong? Nope. Not at all. It’s totally up to you as a parent to decide what you’ll pay your children for and what you won’t. 

The only thing I suggest you do is to make sure that you have chores listed that they don’t get paid for as well as the ones they do. This will help them to understand that there are expectations that they must follow because they belong to your family. 

How to Teach Them About Money

Here’s how we do this – we first had to understand that our children had no concept that money buys things. So, we took our boys to the dollar store with their Christmas money and let them pick out and purchase whatever they wanted with the money they had. 

This taught them that money buys you things. Then we had to teach them that if you don’t have enough money to buy to something, you’ll have to save it. This is the hard part, because there’s been lots of tears that they can’t buy the toy they really want because they have to wait until they save up money to get it, but this the critical part of teaching them discipline for saving their money. 

Then we taught them to give their money. They give of their money every week at Mass as their “tithe” but really since I want them to enjoy giving their money like Mommy and Daddy, I just let them pick out how much they want to give without making them give exactly 10%. As they get older, we’ll explain the 10% and tithing in more details. 

We also have them pick out how much money they want to give to “the babies” which is for The Hope Center which is a local charity to help mothers. 

The Most Important Thing

The most important thing to remember about teaching your kids about money is to never give up. Your kids, no matter their age will make mistakes with money. Heck, I still make mistakes with money and I’m 30 years old! So, it’s unrealistic of me to expect my kids to never make a mistake. 

When our kids make a mistake with money, we need to be there to guide them. We don’t have to bail them out of their mistake – in fact, I think it’s best when we don’t bail out our children and instead guide them on how they can pull themselves out. After all, we aren’t going to be on this earth forever.

In fact, my mom taught my brother and I how to budget long before we could even spell the word (this is a system like the one my mom used) but I still failed with money at 21 years old. And no, my mom didn’t bail me out and I’m forever grateful that she didn’t. Granted, I wanted her to bail me out but I wouldn’t have learned a valuable lesson had she. I had to pull out all that budgeting knowledge she gave me many years ago to figure out my way back out of the dark. 

So don’t lose heart if your kids make mistakes with money. Just teach them the best that you can because when you train up a child in the way he should go, even when he is old he will not depart from it. (Proverbs 22:6)

What is a piece of advice you can give a parent who is trying to teach their children how to manage money?

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