Two years ago I ran a guest post from Danny Kofke, a special education teacher in Georgia who had written a book called How to Survive (and Perhaps Thrive) on a Teacher’s Salary. It’s about how to live well on a teacher’s salary, a book that has a message that anyone who was looking to live more on less could benefit from hearing. Danny’s now written a second book called A Simple Book of Financial Wisdom: Teach Yourself (and Your Kids) How to Live Wealthy with Little Money. In this guest post Danny shares his wisdom on how to teach children the value of money–and how he did just that with his daughter Ava.
I started teaching my daughter Ava about money when she was three-years old. My wife and I started having her do simple household chores–cleaning her room, brushing her teeth, and so on–for which she would get an allowance. Every night we would check off the chores that she’d completed, and every Friday we added them up and she was paid–$1 per week.
We set Ava up with three jars: one labeled Give Away, one Savings and the other Spending. From the $1 she earned, we had her put 10 cents in the Give Away jar, 25 cents in the Savings jar, and the remaining amount in the Spending jar. Ava caught on to the notion of the Spending and Savings jars very quickly. If we were at the store and Ava wanted something frivolous, we would simply say, “We’ll have to go home and see if you have enough money in your spending and/or savings jar to buy it.”
She also grasped the meaning of the Give Away jar. One year we knew of a family that lost their father shortly before Christmas. Ava used her Give Away money to buy the man’s little girl a stuffed animal. Another year, Ava used this money to buy canned food for needy families in our community. This past Christmas, there was a family at her school that was struggling. Ava used the money in her Give Away jar to buy them a gift card to a local grocery store.
Recently, Ava showed that these lessons in money management are paying off. Twice a year the media center at her school hosts a book fair. The children get very excited and want to buy almost everything they see—it’s almost like Black Friday for kids. Last year, Ava came home after visiting the book fair and told us that she just had to have a Taylor Swift book. We probably have thousands of books in our home, so it was hard for me not to say anything. However, we looked in her Savings jar and she had enough for this book—$5. The next day when she returned from school, she still had the $5 in her backpack. We asked why she didn’t buy the book and Ava told us that it had sold out so she chose to buy nothing. I was shocked, because most kids (and adults too) would have found a way to spend that $5. This showed that some of what I was teaching Ava about with money–that saving for things you really want–was sinking in.
When Ava turned six, we gave her a raise–$1.50. But we also added some additional tasks to her weekly list. She would have to gather the garbage around the house every Sunday and clean her bathroom—this included cleaning her mirror and sink and scrubbing the toilet—once a week. I explained that by doing more she could earn more, and that when you go above and beyond in your job, you are mostly likely going to be rewarded financially.
Ava continues to put 10% of her money in Give Away, 25% in Savings, and keeps the rest for Spending. It’s really how all people should be handling their money, but the lesson is much easier to impart when you’re dealing with just $1 at a time.
I feel if Ava continues to apply these lessons in life— gives away 10% of her money, then saves 25% of it and uses the remainder for spending—and goes above and beyond in her job, she will be wealthy in more ways than a fat bank account can show.
Danny has graciously offered to give one lucky Suddenly Frugal reader a copy of A Simple Book of Financial Wisdom: Teach Yourself (and Your Kids) How to Live Wealthy with Little Money. Interested in entering to win a copy? Post a comment below with one of the ways you have taught your children–or plan to teach your future children–the value of money.