So your kids are getting a little older and you think it is time for them to learn a little about how the real financial world works? I have devised a plan with my children that I hope other might find useful. While this plan does require hard work on both the parents and child’s side it is defiantly worth it. The Idea Behind this plan is to ready your children for paying Bills and budgeting money. Below is the step by step guide I have devised.
Things you will need:
Hand/computer made checks (2 kinds)
Your own personalized plan
Here is how my plan works:
I use my kids school hours as work hours. They get paid $3.50 per hour for the actual hours that they are in school. I know it sounds like so little but it all works out in the end. They also have the opportunity to earn money through the week by doing tasks , helping people etc…
Secondly , I split all my basic bills up among the people of the house. For example if rent is $600 a month and 4 people live there I divide 600 by 4 . The numbers that i come up with for each bill is posted in the notebook for them to view at anytime. My kids have Rent , phone , electric, cable and food. If my kids have to pay me back for anything , such as a phone bill they ran up , then that is also totaled into the notebook.
The kids work week goes from Saturday to Friday. On Saturday morning I issue a check to each child for their earnings that week , including any extra earnings they acquired. Then we sit down together and pay any deductions they have acquired through the week ( this is of your choosing, my deductions are set up to make them accountable for picking up and cleaning up after themselves. If they do not do it and I have to do it then I charge a small fee for doing it.) After deductions are paid for we move on to budgeting their money and forecasting their future Weeks earnings so that all their bills are able to be paid. If a bill is to be paid that week then they will write a check out to the chosen company as if they were actually going to pay the bill and turn it in to me. All of these deductions and bills are then deducted from their running balance in the check register. This is to be completed by your child with you present if need be.
With the Balance that they have left in their account they can either save it or cash it in to me for cash. Now , I do not cash it in dollar for dollar. My cash in rate is .05 cents on every dollar. Why? It is just my personal belief that children have no need to carry alot of cash on their person. If they choose to save their earnings until they have a larger amount built up then they can do so , but they will not get all the cash at one time unless we are going to the store to buy something specific.
Another thing we are doing with this plan is allowing the kids to buy their Televisions and such from us for a set dollar amount. Keep in mind that they have to save enough of their earnings to pay it out at .05 cents on the dollar. This may seem a little harsh to some people but I firmly believe that this will provide a valuable learning experience for the kids.
The whole idea behind this plan I have formulated is make the kids responsible for themselves , their actions and to learn how to manage money at an early age. I sincerely hope that this can help someone who may be interested. I am always trying to devise new plans that will help my kids with their futures.