One of the greatest gifts I have been given is to be what is called a “first generation American.” My dad came to the U.S. over 45 years ago from Guyana to pursue a degree in law. The financial lessons I learned sandwiched between my American and Guyanese cultures have helped me to understand the value of money at an early age.
Money is earned, not given. I do not remember ever getting an allowance. I worked and earned money, starting at about age 4. My dad was very clear on what work was. Work was helping out with household chores, cleaning my room without being asked, and getting good grades and reports from my teachers.
When I did these things, I earned money. If I did not, dad deducted the money I earned. I learned that I have to work to earn money and not to expect anything for free. Consider having your kids earn money instead of an allowance and hold them accountable when they do not do their work. You will teach them the value of money and to have a strong work ethic.
The pain of discipline or the pain of regret – my choice. The money we earned was to pay for school activities, clothes and any extra expenses from a family outing (a balloon, toy, food, etc.) My dad held us accountable. Once the money was gone, so was our ability to pay for school activities and buy anything for an event. This taught us to think about the future and to budget our money for things we want to do.
When you give your children the money they earned, come up with a plan for it. In our home, our children give 10% and save 10% ,and we work with them to plan for how they will spend the rest. We make it clear, just like my dad, that once the money is spent there is no “Bank of Mom or Dad” to bail them out.
Be generous. My family were givers from as early as I can remember. We gave of our time but also our money. We gave money to our family in Guyana, to causes we cared about, and to our church.
This taught me from an early age that money is a tool that can be used to get the things you want but also to help others in need. It also led to feeling gratitude for the things you have. Teach your children the true value of money by having them donate some of their earned money to someone in need.
Of course, not every family is like mine. Your family and values may be different. Whatever they may be, come up with a game plan to set a strong financial foundation for your child(ren) so they can build a successful future.