“Daddy, this dime is REALLY old. It says 1995. Tell me a story about 1995.” This little child doesn’t even know it yet, but he is in the process of learning good habits for saving money. You see, his parents understand that there are two keys to teaching children the value of money. One is to make the lesson fun and the other is to start teaching at a very early age. He’ll thank you years later because he will understand that being rich isn’t about how much money you have, but instead about what you do with it to make a positive difference in your life and in your world.
As parents we work diligently to give our children all the necessities of life. Little Johnny doesn’t know the difference between wants and needs so it doesn’t take long for him to set his eyes on the latest toy or gadget and want it so bad! Stay strong parents! This is your first of many encounters with, and quite possibly, the toughest challenger you will ever meet. At the age of four or five, Little Johnny will beg, plead, threaten and yes even negotiate to get his way. If we are smart ourselves, we refrain from giving in, but instead, teach him to save his own money for that special toy.
Whether you choose to give allowances or require your child to do chores for his money is really up to you. Both ways have pros and cons, but what he DOES with that money once he has it, is the real lesson here. On the same scheduled day each week, invite Little Johnny to bring his piggy bank and meet you at the kitchen table.Tell him that the money you are about to give him is his very own and that you will help him get the toy he wants with his own money.
It’s now time to teach the 80-20 rule. 80% of what we earn can be spent. 10% is saved for the faraway future and 10% is given away to help others. For the sake of this example, we will say that he is receiving $5.00 per week (about $1.00 for each year of his age). Have the $5.00 divided up into four dollar bills and ten dimes. Count it out with him and remind him that a one dollar bill equals ten dimes, and that a dime equals ten cents.
Next, let him know that with our money we always save 10% and donate 10%. He, of course, won’t understand the terms of saving and donating, but he will become familiar with the words and eventually embrace their meanings. Assist him in putting the four bills into his very own wallet. With the dimes, divide them up into two stacks, putting five dimes (10% of $5.00) into the saving stack and five dimes (another 10% of $5.00) into the donating stack.
Together you can talk about the $4.00 spending money and what he wants to buy with it. Explain that the saving stack is not to be spent, but will grow and grow as each week passes. Let him know that in a few minutes you’ll let him drop the 5 coins into the piggy bank, so that he can be proud of his investment. Give him choices such as his Sunday School collection or your local food pantry for donating the second stack. You’ll be surprised how much he will understand if you talk to him about other children in need and how important it is to help each other.
Now it’s time for the really fun part. Before putting all of the dimes in their proper places, together look at every dime very closely and help him notice that each coin is stamped with the year it was made. Take each coin one by one and read the date to him. Then remember a special event or activity that took place in that year and share the story with him. For instance, the 1995 coin might be the year that you and his mommy were married. He’ll delight in the stories and be anxious to hear what each dime’s date represents. Always include a dime with the year that he was born. Here’s why:
“Daddy, this one says 2004. Tell me what happened in 2004.”
“Well son, that was the year that mommy and I wished and prayed for a little buckaroo just like you to come along, and sure enough we were blessed with YOU!” ….. Being rich is not about how much money we have. Being rich is about so much more.