Teach the Little Buggers to Count

My education was quite simple. As far as money was concerned, I followed the parental motto: "Don't spend any!"
We took a shower once a week with the light off, we could not read in bed because it meant a light would keep "burning." When we needed new pencils and notebooks for school, it was a hard battle with Mum and we always got the cheapest ones. All through my secondary school years, I walked on 5 Francs sport shoes, which resulted in a nasty foot wart that I still carry around as a reminder of yesteryear.

Nowadays, thank Goodness, things have changed and money is not so scarce as it used to be. Granted, it is also easier to spend it, what with all the gadgets available, not to mention the competition between kids to get the latest toys, the newest fashion shirt and the most aired sport shoes.

As soon as I was old enough to complain about money being too little, my parents put me to work. Not much at first. I was to do chores around the house. Then, slowly, it became a give/give agreement. If they were to give me something, I was to give my time. Hence, going to school after I turned 11 was a treat, and I had to work on week-ends and holidays to show them it was worth their while.
They had their own business so -- please don't scream "Kids' Labor" all over the Internet (I should be so lucky!)-- I had to help out if I wanted to remain a school kid.

Nowadays, if I wanted to put my 10-year old to work, I probably would get arrested. So, I won't. But then, how do I teach him about money?
I suppose it is a common fact that parents give their kids pocket money. Around coffee mornings, there is the recurrent question of "How much pocket money is enough or too much?"

I used to give my son 5 Francs per week (which is about 5.50 Dollars). What can a kid do with 5 Francs? Beside the purchase of sweets that no one wants to encourage, if my son was to have any influence on his financial status, he would need to save up one full year of pocket money to be able to pay for an after-school activity or buy his own XBox games. And then, he would have to wait another year before challenging his money handling skills again.

Does that make sense?

We give children pocket money so that they can learn to manage their finances. But unless we want to hear the well-known "money's too few to mention" expression, we need to consider the amount we are "sacrificing" to their education, and the means of educating them.
We commonly oscillate between "don't spend or you'll have nothing left!" and "well, if you want this game, you will have to buy it with your pocket money! which actually correspond to a parent's frustration towards a willingness to see a smile on a child's face and the fear to find an empty purse in the handbag.

Are there any solutions out there?

Dave Ramsey's website is a source of tools for the family. But let's look into the kids' packages

His famous envelope system is adapted for kids with the Junior Adventure Bank. Children learn to split their "income" between the three main posts: Give, Save and Spend.
They need parental guidance in dividing their money, but these "banks" will help them understand that the three options go hand in hand.

The Financial Peace Junior has it all, parent guide, and all kinds of handouts to help your kid manage money.

Because we are talking about kids education and coaching, there are story books geared at explaining the three important posts: "Junior discovers saving", "Junior discovers giving" and "Junior discovers spending," but also tackles work, integrity and debt.

It is vital to teaching kids from a young age about money and financial peace. We might not realize it, but our children, our little "sponges" listen and watch as we struggle with financial issues. They might end up collecting our bad habits, over-worrying, over-spending on pay day, lack of financial planning.

Dave Ramsey's products can help you find the right structure to educate your little one. 

How much pocket money?

I would suggest to start with a "package deal." Propose your children a job around the house. Something manageable with a "salary" attached to it. This way, they get their starting bundle but they also learn that money is not free. With this as a start off, they can then learn to divide their earning between Give, Save and Spend.

I follow the common calculation and give my child an amount that is equivalent to his age. He is now 10 years old, so I give him 10 Francs per week. Each week, he has to divide his money accordingly.

I am confident that he learns to handle his finances. As an added bonus, I also learn to handle mine, as I am becoming his role model in this area of growth.