Up to Mid Primary School Age
➢ Earning Pocket Money
With electronic games and gadgets in abundant supply in the modern world it is way too easy for kids to spend way too much time with instant entertainment. We have created an environment where kids can reach adulthood
potentially without ever having been responsible for much at all, yet suddenly they are required to be responsible for providing for their own needs and living a fulfilling life, providing for a family.
By giving your kids appropriate chores that help support your family life they learn responsibility and acquire a work ethic that will keep them in good stead for the rest of their life.
Create a list of age-appropriate jobs for your kids to choose from that have a value attached to them, e.g. washing dishes, drying dishes, stacking the dishwasher, unloading the dishwasher, sorting the washing, folding the washing, washing the car, weeding the garden, mowing the lawn, walking the dog, feeding the dog, doing the dusting or similar.
It should be compulsory for them to regularly do jobs to help out and these should be on a regular roster, so they occur at the same time each day/week. This teaches them routine, gives them a sense of the importance of showing up, makes the jobs easier to face because they become part of a normal routine, and makes your job as a parent easier to enforce the carrying out of the jobs.
If your kids choose to take on more than two jobs, they get paid pocket money for subsequent jobs.
Pocket money goes into three money boxes: Spending, Saving, and Giving.
➢ Making Financial Choices
Take your kids to the toy shop with no money to spend in the lead up to their birthday. Make it clear that no money will be spent on this trip. Have them make a list of items they would like to buy that add up to a given amount of money.
For example, if you gave them $100 to spend and it had to be spent on at least 3 items, what might they do with the money? They must present you with three potential shopping lists with different purchase combinations that get them to within $5 of the allocated amount, and then choose which option they like best and explain why.
➢ Value for Money
How many different prices are there for the same product? Have your kids look for all the places you can buy ice creams, drinks, meals, etc. Get them to record the different prices and locations and have them identify which purchase option/retailer offers the best value for money.
If they were purchasing with their own pocket money, which supplier would they choose on a hot day?
Make this a regular exercise with other products, e.g. takeaway food vs food prepared at home and taken on a day trip. Offer them the difference in cost to keep as cash if they are prepared to plan ahead and take food and drinks from home on the next outing rather than buying from take away outlets. Of course, they will need to check the prices at those take away outlets.
➢ Giving
Have your kids pick a charity to donate to regularly and help them find a way to donate from their pocket money. Have them follow the work of this charity so there is meaning and connection, e.g. sponsor a child.
➢ Investing in Income Producing Assets
Offer to sell something like the washing machine or the dishwasher to
your kids using their pocket money to pay for it (for a price that requires an appropriate amount of blood sweat and tears), and then pay them a set amount (maybe 50 cents or $1), every time it is used so they get to learn the value of saving up to invest in income producing assets.
You can also use this exercise to teach them about using finance to speed up the process of becoming an investor. If they are getting tired of how long it is taking to save up for the asset you have offered, lend them the money and charge them interest, exactly the same as if they were borrowing to purchase an investment in the real world.
Ideally you will need to arrange the finances so the repayments do not consume all their income, but they get to learn the value of leveraging the use other people’s money.
