Our daughter moves to Chicago next month to begin her first full-time job. She’ll earn more money than she’s made in her entire life. There are lessons my husband and I taught her about managing money that I feel good about and lessons I wish we’d known we should teach her, like:
How to use a bank: When our daughter was sixteen years old, my husband helped her open a debit account and linked it to ours. We not only see how much she’s spending, but can also transfer money between our accounts in case of emergencies.
Save your allowance: We struggled to develop a satisfactory allowance plan. One one hand, when she asked for the latest iPhone, we said, “Save your allowance.” On the other, if you get $10 a week just for existing, what does that teach? Some chores you should just do because you’re part of a family: clean your room, put your dishes in the dishwasher, do your own laundry, etc., right?
If you have a car, you have a job: My parents gave her money to buy a car and we paid for insurance, but gas and oil changes were her responsibility and her allowance wasn’t enough to cover those. My husband and I think working either in retail or food service should be mandatory and the earlier in life, the better. Those industries teach excellent customer service lessons. Our daughter got a job at an ice cream shop. We got discounts. 🙂
You need skin in the game: We had a Roth IRA to pay for college. She used it up freshman year. To pay for future years, she had a scholarship, financial awards, and student loans, but these didn’t cover all her expenses. So we made a deal. We’d make up the difference for the next three years. Any classes beyond four years, grad school, and student loans are her responsibility. She also had to work part-time. As a result she figured out how to get her bachelor’s degree in four years, sought free money (e.g. she received a grant for being a vice-president of her campus activities board), and worked; sometimes three jobs at a time. In other words, she learned how to hustle.
Be generous: When you’re comfortable giving money away, it loses its power over you. Growing up she helped us give and serve. Today she is known for her generosity and volunteerism.
Good credit is important: We intentionally avoided helping her get a credit card until her senior year in college. My husband counsels her on what to charge, how to check her balance, and when to pay the bill.
There are a few things I wish we’d done: Taught her how to make a proper budget, forced her to save for a goal (e.g., buying her own car), and avoided student loans. Last week she was at the grocery looking for something over the counter to take for her allergies. She texted me a photo asking if the drug would make her feel better. The package revealed she’d chosen a generic instead of brand name; maybe she learned something after all.
How do you teach your children the value of a dollar? Please share your story in the comments section below.