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How To Teach Your Child Financial Responsibility

Many parents wonder how to teach their children financial responsibility. How did the children learn to govern money? When do you give them money? Do you give them the money? Do they get the money from somebody else? Those are big questions on a lot of parent's minds. And I know many parents go back and forth between "Do you do allowance? Do you not do allowance? Do you pay them for chores? Do you say no, you live here so you don't get to be paid for chores?

" What do you do What's the best way for them to develop a healthy relationship with money so that they don't have scarcity mentality but they have an abundance mentality. But then at the same time, they respect money and they don't waste money. We want them to save money. We want them to be philanthropic with their money. 

Wow, money is a huge discussion. In this article, we're going to be talking about money and children. And the best ways that I found to teach children financial responsibility. At what age did you start buying your own clothes? I know I was supposed to start buying my own clothes when I was 12. 

But for some reason, I still kept manipulating my mom a little bit so that she kept buying them here and there. I think she felt bad for me or maybe she just really wanted me to look cute or something like that. And so, for some reason, I didn't always buy my own clothes starting at age 12. But I was supposed to. And honestly, I think there's wisdom in that. I told my children when they were young, "Oh, right now mom and dad buy you everything." But when you get to be 12 years old there are so many wonderful things that are going to happen. 

You're going to start to become an adult which means that you will get to not only miss out on trick-or-treating on Halloween and hand out the candy instead. Because that's one of our family rules. But you will also get the opportunity to pay for all of your own clothes. Won't that be great? And when they're little and they love spending money and spending their own money, they're like, "Yeah, that sounds great." And so, that's how we start talking to our children in our family about who gets to buy the clothes. 

So, when they're 12 years old, they graduate into this phase of life where if they go to a birthday party, they get to buy the present for their friend. If they're going to a particular activity like a movie with friends or to the swimming pool with friends, they get to pay for themselves. And if they are buying clothes, they get to pay for themselves too. Of course, we still pay for a roof over their heads and clothes...Not clothes, that's theirs. 

But food and you know family activities and stuff that we do together. It's just that if they want anything special for themselves. I'll tell you what. My children turn into really great planners. I know some people say, "Who would ask for socks and underwear for Christmas?" My children would. 

They would totally ask for socks and underwear for Christmas because they wouldn't want to pay for it themselves. And so, what they do is on their birthdays and on Christmas and other holidays or times where they would get gifts, they'll say, "Oh, mom. I really would like this shirt or this thing." Of course, we get the other things too. But they save those purchases until those times. Unless they really want something extra at another time. This teaches them to respect their belongings, to take care of them. 

They're not going to get replaced at the drop of a hat. They decide that they like nice things because they're gonna be picky about what they get. So, they want nice things but they're going to take care of it. That's called taking pride in your possession in a good way. Right? Taking responsibility for what you have. And that's what they learn because they have to buy it themselves. 

They also learn a lot about money management. "Hmm, if I want this shirt but I also came to the store because I wanted to buy this birthday present for my friend, Susan, do I really have enough money to buy both of those things or do I feel like I don't want to spend that much money yet?" Now here's the deal, my children have lots of money. 

Sometimes my children have more money in the bank than I do. And it started really small. Here are 5 things we did to help my children earn money and have a good attachment to the money that they have. Number one, we decided that we were always willing to help our children start a business whatever it was. So, one time, London decided that she wanted to set up a stand. 

You know how people set up stands to sell lemonade or something like that. She set up a stand in our cul-de-sac to sell water. We still laugh about it to this day because I'm like, "Yeah, sure. Try it. See what happens." So, she set up her water stand. I think she had to mercy customers probably because she just looked so cute. And she came in and she said, "Mom, I don't think my business was very successful." And I said, "Oh, you think? Probably not." This actually brings me to number 2 which is you have to be willing to fail too. I knew she was going to fail at selling water but I allowed her to do it. 

My husband and I both own businesses. So, I own teaching self-government. calm, I also had a nonprofit organization. And then he owns another business, a contracting business of his own. So, we know what it takes to set up a business. We know you have to be able to fail sometimes. But we also know that sometimes the most surprising things turn into the best business opportunities. 

So, we're willing to allow our children to try anything and to allow them to fail. We've had a lot of businesses over the years. Lawn mowing businesses, childcare businesses, kite-making businesses, rock painting businesses. Businesses where we sell all the junk out of our house and hope for the best. Anyway, we've had lots of different businesses. And they've learned along the way. 

But over time, because we had family businesses, our children started applying for jobs. And we allow them to apply for jobs. So, they would apply at first to earn money doing extra chores. So, they would say, "Mom, can I apply for a job? I would like to earn $5." And I would say, "Oh, yeah. Sure, you can apply for a job here. 

I have this job that you could earn $1 if you'd like to apply for that. And I have this other job that's a bigger job, you could earn $4, you could apply for that. And if you wanted to do this other job, you could earn another $2 and you can apply for that as well. But when you apply, you have to tell me why you want the job, how you plan to do the job and when you expect to be done with the job. Otherwise, I don't know if I'll hire you." So, they learned, "Okay, I've got to show commitment then if I'm going to apply for a job." 

So, they couldn't say, "I don't have any money." Because there's always an opportunity to earn money. They just had to choose to do the earning of it themselves. So, anyway, that's how I started. They started applying for jobs and doing chores around the house. 

Well, over time, dad's business may be needed some fliers passed out somewhere or I needed someone to help package books to send out. The people who wanted my latest parenting book or something like that. And so we started paying them peace rates for different things that they would do if they wanted the job. So, at first, my children all earned 10 cents every time they put a book into a shipping box to send out to other people. 10 cents. But they thought it was awesome. Like, "Mom in 10 books, I get a dollar." They were so amazed by that. They thought it was incredible. 

So, let him earn money. Help him figure out ways. Just because you don't have a ton of money, doesn't mean that they shouldn't get the opportunity to try to figure out how to earn some. Either from you or from other people in your community. The third way to teach your children to be financially successful is to teach them how to work hard. I've always worked with my children. Every day, we have family work time together. 

They also have their own tours that they do together. And then we have other special times especially when it's good weather where we all work in the yard. Oftentimes, 4 hours a day. So, they don't complain about work. It's just part of life, they know how to do it. They're confident with it. If they feel that way about work, then they will earn money. They will be successful financially. 

It's the lazy people who always want a quick fix, "Oh, I just need... I'm just going to start out having passive income and never have to do any work or something like that." I mean passive income, that's a great thing but I think a person should learn work first. In fact, even though my husband and I both have businesses, we always hope that our children will go and get a job, serving food somewhere at some fast food place. Or doing some really dirty job cleaning out garbage cans or something. 

So, that they really learn the value of work, the value of a dollar, and that they can do anything to earn money. One thing that I think parents are really shortchanging their children on nowadays is they are not teaching them to work hard. 

They're not giving them the nudge to go get that job at McDonald's or at the dog groomer. I groomed dogs in summer when I was in high school scrubbing dogs. I was the washer. I didn't get to do the fun part. I just washed dogs. They'd bite me. They'd shake their dark water on me. The whole day long, I wash dogs. 

That's a dirty business. But I did it and I earned like $1 a dog for this grooming place. Worth it. Because I learned how to work. And that's what our children need. Number 4 and number 5 have to do with saving. So, first, number 4, save half. There was a book that my father had me read when I was a young girl called The Richest Man In Babylon. And he said, "You know, I wish I would have followed this book earlier." He said, "I'm not the richest parent, but there's no reason that you can't be." So, he said, "Here you go. 

Read this book and see if you can be better at managing money than me and your mother have been." And I was like, "Okay, good point. They've always been talking about how we don't have that much money so he's got a point. I think I should read this book." So, he had all of his children read The Richest Man In Babylon. We've read it and it talked about saving. 

Saving certain percentages for different amounts of things. It mentioned saving 10% to a savings account. And when I talked to my dad about the savings program investment... Mentioned in the Richest Man In Babylon, he said, "Nicholeen, you don't have any expenses in your life. You don't have to budget your money out like it says in that book. I would highly recommend saving half your money right now. 

Not just 10%. Save half then you'll have some money to do something with. In fact, you should always try to save half. then you'll make sure you make more." I was like, "Good idea, dad." And so, I started saving half. When I would babysit, I would save half. When I worked at the bakery or the dog groomer or the veterinary hospital, all the crazy things I did or when I taught people lessons on the side, were all things that I would take the money from and I would save half of that money. By the time I was 18 years old, I bought my own car. 

Because I had saved half. I paid for my own college. I paid for everything myself because I saved half. Now, another saving tip that I learned in The Richest Man In Babylon is you save 10% for a charitable contribution. We're a religious family and so we paid tithes to our faith. And it was 10 percent that we were supposed to pay. So, I always saved 10%. And it's 10 percent to give away. 

That's what it is. So, I've taught my children to save 10% to give away to not even think of that money as their own. But think of it as you giving back to a higher power that has watched over you and bless you enough that you have that money. Saving 10% and giving it away keeps a person humble. So, let's do the math.

How much money really was I keeping of my own money and actually using? 40%. And that's what I've taught my children to do too. And that's why they have so much money in the bank. They are calculating, "Hmm, I wonder how many months I need to work before I can fully pay for another year of college or before I can buy this car or whatever it is." They're frugal, they're smart but when they need a spend, they spend without blinking an eye. Because they've got the money there. They know the skills. They can make the purchases with free feeling inside.

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