We've all heard the saying, "Money doesn't grow on trees," but this can be a hard concept for little kids to grasp. They see the shiny new toy that everyone wants and don't understand why they can't have it. By the time kids are in kindergarten, they start differentiating between different coins and learning different monetary values, which makes it a great time to start teaching your kids about the value of money.
We talked to developmental-behavioral pediatrician Dr. Adiaha Spinks-Franklin of Texas Children's Hospital and Micki Grimland, owner and chief psychotherapist from Southwest Psychotherapy Associates about the money talk and when and how to institute an allowance - and what to do when your teen gets a job and the slight financial independence that comes with it.
First of all, praise should really be the main reward for kids when they're growing up. If you use money as an incentive every time you want them to complete a task, they'll grow up expecting to be compensated every time they fulfill their responsibilities!
If and when you decide to institute an allowance, you want to make sure that they are working in some way for the money like doing certain chores around the house or helping out grandparents. That way they are also learning responsibility and feeling valuable in their family.
"They don't just get money each week for no reason. That’s not a good life lesson. The life lesson is we’re all a member of a community inside the household and we have to do our fair share," says Grimland.
Oftentimes, allowance can be a great way to teach kids to save their money for that shiny toy or a longer term goal. Spinks-Franklin says, "Allowance allows them to earn with a goal in mind to spend it on different things." She recommends having a tangible way like a piggy bank or a jar where they can literally watch that money grow.
"Allowance allows them to earn with a goal in mind to spend it on different things." - Dr. Adiaha Spinks-Franklin, developmental-behavioral pediatrician, Texas Children's Hospital
In addition, you can demonstrate those principles with how you save your money on a daily basis. Bring your kids to the grocery store and talk about the cost of items and what's on sale.
Spinks-Franklin says, "Let’s say your second-grader is saving up a dollar that she’s earned doing chores or helping grandma because there’s a particular toy or activity that she wants to see. If she takes that money and spends it on something else, she’s going to quickly learn that she’s not going to get that particular toy she wants or it’s going to take her much longer to get it."
So what about when teens take a job at a local department store and no longer need you for an allowance? The parents still get veto power!
"Them having money that doesn’t mean they get to buy anything they want," says Grimland. "Let’s say your daughter wants to wear short shorts with her bum hanging out. She’ll say 'I bought it with my own money.' So you say, 'You’re living in my house and you don't pay rent so I get to say how you spend money.'"