If you have young children, I’m sure you have discovered, as we have, that they aren’t necessarily born with an active, self-governing work ethic. We have tried several different methods to get our kids to do the simple things like pick up their clothes, make their beds, so simple household chores for us, and even the basic things like brush their teeth and comb their hair. Most of these methods have been appallingly ineffective, and left both the parents (us) and the kids (them) frustrated, grouchy, and vindictive. Then we discovered these 4 reasons to pay your kids and stop giving allowances.
I want to give you a glimpse of the method that works for us in this blog post, and tell you how it has been a real game changer for us. Our kids’ attitudes have greatly improved, and they are learning the value of reward for work (AKA the value of the dollar). We have started giving our kids $1 when they complete their preassigned morning chores, and $1 for completing their preassigned evening chores.
The method I want to introduce to you was developed by Dave Ramsey and his daughter, Rachel Cruze. I heard Rachel speak in Orlando a few months ago at the doTERRA Leaders Convention and was so intrigued by what she shared. Rachel and her father, Dave Ramsey, have prepared a Smart Money Smart Kids teaching series that include their Smart Money Smart Kids book , a Smart Money Smart Kids workbook, and six practical, video-based lessons that give parents a step-by-step approach to teaching their kids about working spending, saving, giving, debt and contentment. They believe that this teaching tool will help their kids learn to make wise money choices and build character qualities so they will win not only with money, but also in life.
Because this method has been so successful in our parenting experience, I want to share a brief glimpse at each of these principles. I’m sure there are some of you who are struggling, as we did, with nearly daily arguments and frustrations as we tried to get our kids to learn to be responsible for the simple chores they needed to accomplish to share in the responsibility for our balanced, thriving, and happy home environment.
Dave Ramsey gives his own personal experience in these words:
While we have never perfectly executed the money-smart principles we teach in this book, we have succeeded in raising money-smart kids. Of all the successes, accolades, and fame I have been blessed with, what I am most proud of are my children. Sharon and I have three competent, confident, poised, and wonderful adult children. They are winning at their spiritual walks, their marriages, and their careers, and all of them handle money well.
The basic principles used in this method include:
- Work—It’s NOT a four-letter word
- Spend—When it’s gone, it’s gone
- Save—Wait for it
- Give—It’s not yours anyway
- Budgeting—Tell it what to do
- Debt—It IS a four-letter work
- College—Don’t graduate from I.O.U.
- Contentment—The war for your child’s heart
- Family—Put the FUN in Dysfunctional
- Generational Handoff—Blessings or Curses
Because we have younger children that we are teaching right now, we are not focusing on all of these principles right now. But I do want to highlight the four that are most important for us right now:
Work—It’s NOT a Four-letter Word
One of the most important lessons we can teach our children is to be hard workers. Teaching our children to work helps them to learn early that work creates discipline, and when you have discipline in your life, you are a healthier person.
Frank and I have certainly learned that lesson. Managing a very successful home-based business while caring for our farm with its nearly one hundred animals, gardens and homesteading lifestyle, plus blogging, writing books, and, most importantly, raising self-governed, happy children is certainly hard work.
But there’s no better feeling that completing all the various work that goes into just one day on the farm and in the business, and falling down on the sofa with my feet up, or soaking in a tub of hot water, and feeling completely exhausted—yet completely fulfilled.
We want our children to learn to recognize that same wonderful feeling of fulfillment for hard work done. They certainly won’t feel that way after sitting in front of the TV or PlayStation all day in the middle of a room littered with dirty dishes, thrown off clothes, and toys all over the place.
But completing some preassigned chores like making their beds, picking up their rooms, completing some simple farm chores, and helping with the dishes will create a sense of accomplishment, something they can feel good about. It’s that feeling of accomplishment that will give them the confidence that they can go out and win at whatever they tackle.
Teaching our children to work is a necessary skill for life. It is setting them up to succeed, not setting them up to fail. It’s a habit that will stick to them for life.
Train up a child in the way he should go, and when he is old he will not depart from it. – Proverbs 22:6
This method does not incorporate the “allowance system.” Due to widespread use of the allowance system, there’s a whole generation that has grown up thinking money is free. They expect their parents to keep paying the bills until they are adults, and then often believe the government exists to take care of them as adults.
We are trying to teach our children this general rule: Work, get paid; don’t work, don’t get paid. Once your kids understand that money comes from work, they won’t be able to spend money on a toy without considering how much work went into actually making that money. We recently were able to observe how our two young children are learning this principle when we took them on a business trip to Savannah and Orlando with us. They each had several dollars of earnings with them, and we watched as they carefully assessed each thing they were tempted to buy by looking at their money and realizing how much less they would have if they spent some foolishly.
When it comes to the work chores you give to your children, start them young, but be sure you are giving them age-appropriate chores. I recommend you review my post on “Household Chores for Kids Under Seven.” Remember that kids are not born with the work ethic. Character traits of tolerance, perseverance and self-discipline are learned—and must be taught by us parents. It’s up to us to teach our kids the difference between wanting and getting, and how to postpone gratification in order to accomplish and succeed later as an adult.
When you are teaching your children that completing a work chore equals pay it is important to pay them soon after they complete the chores. That is why we pay our children for their work both morning and evening. Younger children cannot understand the concept of delayed payment. Older children might be able to wait to “payday” at the end of the week. Choose an amount of payment that works for your family. Our family is able to pay $1 at a time, but if this is too much for you, or you have too many children to afford $1 each, help them to understand that you are paying them according to your ability. Learning that will make them more responsible family members.
Spend—When It’s Gone, It’s Gone
This principle is one that my little ones learned very quickly. They had a couple of pretty anxious, frustrating experiences where they spent their money on foolishness, and then when they wanted something else desperately they tried begging: “Please, Mom, I really neeed this!” They even tried, “I’ll pay you back, I promise!”
Learning not to waste money on impulse is a very important lesson, and one that even very young kids can learn. Dave Ramsey says parents will learn quickly that, “it takes tremendous strength and resolve to suffer the consequences of their decision.”
To help your children learn that money has limits, Ramsey suggests teaching your children to use the envelope system. As parents we use that system for our own budgeting purposes—we label envelopes for each monthly expense, such as mortgage, food, tithing, entertainment, etc., and put a budgeted amount in each envelope. Once that envelope is empty, there’s no more for that particular expenditure until the next month.
We have taught our children to do the same thing. They have envelopes (mason jars) for giving, toys, saving, and a couple other things they like to use their money for. With younger children it’s important for them to SEE their money, which is why we use mason jars instead of envelopes at the time. As they learn to use this system, we have discovered that one of them is a natural spender, and the other is a natural saver. There’s nothing wrong with either characteristic, but it is very important for your children to learn to recognize which category fits them, and to learn how to be wise spenders or savers, and to spend their money wisely. You can greatly encourage your children in this by letting them watch your wise example.
Save—Wait for It
Learning to spend wisely is just the first step—if we want to raise our children to be successful with money, we’ve got to teach them to save. Americans are certainly not a nation of savers. Research shows that adults are failing with money because of the money habits they developed as children. Saving is a behavior that comes from experience, not knowledge. Ramsey says:
After decades of coaching adults who have messed up financially, as well as those who have become wealthy, I am more convinced than ever that behavior is the primary indicator of successful wealth building. If you want to know if someone will win with money, all you have to do is look at his behavior and the character that drives that behavior. An adult’s ability to work well with people, have extreme integrity, and display emotional and spiritual maturity are key to building wealth and keeping it. Great talent might cause someone to get rich, but it usually flames out if he doesn’t know how to behave like a grown-up.
You are teaching behaviors that become character traits when you teach your children wise spending, saving, and giving behaviors. These character traits will teach them how to win at life.
Give—It’s Not Yours Anyway
One of the most important lessons we can teach our children is that money is not theirs. We believe that God owns everything, and He asks us to manage it for Him. Our children will be less selfish as adults if we teach them to view wealth as a responsibility, not a meal ticket. Their futures will be brighter if they learn to live with a spirit of abundance, rather than a spirit of lack. Teach them that they don’t own money—they are simply managers or stewards of it.
Our kids are growing up in a me, me, me culture. The antidote for selfishness isn’t a theory; it’s an action, and that action is giving. Teach your children giving by example. Because our children have seen us put an envelope with a check in the offering at church every time we are there, consistent giving has become much easier for them. It’s easier for adults to do their giving online in many instances, but your children will see the principle of giving reinforced much better by watching you write out that check, put it in that envelope, and put the envelope in the offering bag.
Our little ones watched as Frank and I went through the process of eliminating debt. They learned the lesson of waiting and saving through that process, and they also learned that it was important of us to learn to be givers, not takers. They have assisted us in our essential oil business by stuffing the envelopes with the giveaways we send to our team members, and are growing up in a family that values giving.
We have enjoyed creating opportunities for us to give as a family. We’ve taken part in “Angel Tree” programs at Christmas time when we give gifts to needy people. Teaching our children to understand that giving really matters is helping us to raise children who get great joy from giving money as well as getting it.
If you are not religious and do not give to your church, consider giving to a charity that your child can chooses!
Get Started NOW
We encourage you to get started now on this important parenting opportunity of teaching your children to be wise managers of money. It takes time, hard work and discipline to teach your kids to manage money wisely, but you’ll get the reward of watching as your grown kids go out on their own—confident, money-smart, and ready to take on the world.