A number of our blog posts and writings focus on teaching the principles of personal and family financial management for grownups and adolescents. This post contains some quick tips for how best to teach financial soundness to younger children.
Give each young child a glass jar (clear, so it is possible to see the money accruing in there—as opposed to an opaque piggy bank, which is like dropping money into a black hole). Write the child’s name on some tape and affix it to the jar. If the jar is skinny, like a spice jar, the child could fit it into his or her homeschool box, along the edge, if they use a box to house their schoolbooks.
After that, you (the parent) go to the bank and trade in dollars for rolls and rolls and rolls of nickels. Nickels are bulky, which makes it look like the children’s money is accruing quickly. Also, nickels are also easily divisible in small increments for dividing later, at the end of the week when they divide up their nickels between tithe, savings, spending money and taxes. (Taxes are the money that is given back to the parent. This shows the child in spades that he never gets to keep the whole dollar of what he earns.)
Then tell your young children that any time they want to earn money you will pay them a nickel for every ten minutes of work. You have to start with small increments with small children, because you have to have room to increase their pay over time. If you start paying them too much, in the young years, you’ll find the raises unmanageable later! If the children are wasting time, or squandering it on media, TV, or computer, pull them off and say this is earning money time—we will never get today's hours back. We're building a financial foundation and you never get a second change to build a foundation of savings so that money can begin to earn money—e.g., buy tools or whatever is needed, for making more money. Foundations are everything. Imagine building a house without a foundation! Your children’s financial goal is to secure a nest egg. The more visible their progress toward that goal, the better.
Tauna Meyer, recent speaker (along with Renee Ellison and scores of other wise, godly women) at HomeschoolSummits.com , has a lot of wisdom to share regarding motivating young children in this regard (including a Home Blessing Day--though we we switch the day!), at her Proverbial Homemaker website.
For much more on this topic, read Sure Financial Steps for Beginners.