Even though it’s pretty early in her life, Byron and I have already been thinking about how we’re going to teach Izzy about the value of money. We agree that it’s important to start very early. Like, 5 years old early. Around that time, we will start giving her an allowance, that will be split into 3 categories. Spend, share, and save. I’ve seen the method so many different places, that I dont know who came up with it first, but I first heard of it through Dave Ramsey. She’ll have money that she can spend as she pleases, money that will be saved toward something that she wants, and then money that she will give in the church offering on Sundays.
She will have responsibilities around our home, and she will not receive her allowance if those responsibilities are not met. As she gets older, her behavior at school, as well as her grades will be factored in as well. Most likely, at age 16, we will want her to get a job. (Byron and I both had jobs in high school, and maintained high GPAs) She will still be expected to follow the spend/share/save principal. We will teach her about investing at an early age too. We want her to understand that if she wants things, she has to work for them, and that life perks aren’t just handed to you. We will of course provide her with whatever she needs, but little extras, like ipods, cell phones, etc, when she asks, our first question will be “Where’s your money? Do you have enough?” We feel that with our guidance, this will teach how to prioritize her spending, how to save money, to not be stingy, and a lot of other things that will set her up for a successful financial future.
Money wasn’t talked about in my hone growing up. When I started making my own money, I had absolutely no filter. While I am grateful for the lessons that I learned from my past financial struggles, I want to make sure that Izzy doesn’t have to learn the hard way, when it’s unnecessary, and can irreparably damage her financial future. We would love for Izzy to graduate from college debt-free, knowledgeable about how to support herself on money that she earned, rather than on consumer debt. We want Izzy to be able to buck the trend, and be an independent, intelligent, rich financially secure woman. We’re trying to break the cycle of poverty not only in our family, but african-american families in general. Did you know that the median wealth (assets vs debt) of a single black woman is only about $100, while the median wealth of a single white woman is about $40k? Scary! We’re hoping that we can save Izzy from that fate, with a few quarters a week in 3 different jars. 🙂
How do you plan to teach your kids about money? When will you start? Will you offer an allowance?