How to raise financially independent children…
Who all likes doing chores? Don’t get quiet now…..What if I told you that your chores can and should make your kids money? Ooh do I have your attention now?
Yes everyday chores are the core foundation to raising financially independent children. However we often times neglect the needs of our little ones because we have been taught a thought process that kids should be seen and not heard. How off this thought process is. Kids should not only be seen and heard but taught how to survive in the real world. And I hate to tell you parents but teaching them to manage money and build healthy work habits, start at home.
Before we push forward with our thought process I want to take you to the biggest most profitable industry in the world, Retail. Yes Chile - retail. This market is a clear indication of how much we spend on our wants and believe it or NOT, we spend a lot of money getting the wants of our kids. But what if, we did this differently by giving them the money and teaching them how to make better financial decisions? As a mother I cannot tell you how often I heard about the wants of my kids and what they wanted me to buy and if you are a parent, I’m sure this is a familiar conversation in your home as well. Ever wondered why? This is because we have not had a healthy conversation with our kids about the value of money and balancing out our needs and wants. This was a everyday conversation until I began applying this philosophy in my own life with my kids.
We now pay off of a chore chart system that allows them to
1. Plan the purchase they want. By doing this it allows them to say do I really want this and how much is it going to cost.
2. Determine what needs to be done to get this purchase and how long you will need to complete specific chores. This is the relationship building portion as it allows you the parent to have a healthy conversation about what chores you expect of them, how often they should be doing them, how much of the money they must save and when the job will be complete
3. Build healthy decision making skills as they have to decide if the purchase is worth the loss of their hard earned money, and if the work they have to put it is worth it.
Let them Make the purchase. I don’t know about you but it does something to me when I have to hand someone all of my hard earned money. There is actually a psychological relationship that we have with money and let me tell you it is either healthy or unhealthy.
The goal is to teach them to make better decision with their money and have them really think about the purchase in the mindset of: 1. Is this a needed purchase? 2. How will this impact my financial outcome. 3. Am I willing to spend this amount on this or is there a better time to make this purchase for cheaper. I know I know, I can hear someone in the background now saying “kids don’t think like that”, but they do if we teach them how to and we can. Now the key is to support what they are learning/learned. We CANNOT bail them out. If we teach them how to do this and tell them that this is how we are going to operate and they are out of money. They are out of money. We CANNOT confuse them by going against the plan as the one time that is done, you will destroy the entire foundation and attitude to money they are learning.