Mini Tycoons – the First of a Three-Part Series on Money

My husband is a very practical person, so it’s no surprise that he works in a very practical field. He’s a financial advisor. He’s always been a saver; I’m a recovering spendaholic. But while I can justify away just about any purchase I make (is that a girl thing?!), I can’t justify not teaching my children about the importance of understanding money, and of respecting its energy. Growing up, Darren was taught the discipline of working around the house and of saving money; however, my parents didn’t expect anyone in my family to do any housework, nor did they pay pocket money (a blissful childhood, really!). I want my children to know that they can’t spend everything they earn, and I want to train them in money management skills while they are still highly absorbent – but cute – little sponges.

When the girls were two years of age, I read an online newspaper article about teaching children to save, and it mentioned a product that would help do that (for children from five years and up). I instantly snapped up two of the products, thinking that if the company went broke, I’d at least have the product for when the girls were five! Well, the company has gone on to produce even more products, so they must be on to a good thing! The girls turned five recently, and I’ve been so excited about them starting to use it.

‘Well, what on earth is it?’ I bet you’re wondering. It’s something really simple – a moneybox called the ‘Money-Ed-Box’. It’s a long moneybox with four compartments. The compartments are called Giving, Living, Saving and Wealthing. When children are given pocket money, or receive money as a gift, they can split the money four ways, rather than spending it all in one go (at the moment we give the girls $2 each a week, working out to 50c for each compartment). ‘Giving’ introduces the concept of taxation and philanthropy, that a portion of any money we make should be ‘given back’ for the common good (you and your child choose a charity/charities). ‘Living’ money is for spending straight away on small purchases, if the child wants to do that (my girls haven’t shown any desire for that, and I won’t be encouraging it!). The last two compartments are ‘locked’, in that they have a screw-down flap, so that the money can’t be easily accessed. ‘Saving’ is for saving up for bigger purchases, such as a bike, and ‘Wealthing’ money is never to be spent; it’s to be saved up and invested (with you teaching them about different ways of investing), and could be the starting point for a house down payment in later years. Once the money in the ‘Wealthing’ compartment reaches a certain amount, you can put it into a bank account in the child’s name.

It’s such a fantastic idea! The moneybox comes with a Kids Money CD-ROM, which allows children to record their savings for each category, and to create goals. I think this early training is just wonderful – my girls will grow up automatically splitting up any money they earn, and not expecting to just spend it all at once. It will teach them about delayed gratification and discipline; about saving up for items that they really want.

However – the program suggests that pocket money not be linked to their role in routine household chores, because the children are a member of the family and should do those things anyway. I agree with that (who wants a brat who says ‘I’m not laying the table until I get my three bucks’!), but I also think that there should ways of earning the money they receive, much as they will encounter in the working world as adults. We don’t pay the girls for household jobs, and have been just giving them their pocket money on a regular, weekly basis (so that they get the concept of saving regularly), but I am concerned about how to make them realize that, in the real world, a paycheque is usually earned. Anyone have any ideas on how to approach this? Or maybe we should just give them this regular money every week as a gift, with the capacity to do extra one-off jobs for extra money (when they’re older, maybe)?

The girls are in love with their Money-Ed-Boxes, and feel very grown-up putting money into the slots every week. I can just see them buying their first investment properties at 21! I’d highly recommend setting up a system similar to this one. If you’re interested in the Money-Ed-Box, take a peek at: http://www.kidsmoney.com.au/html/s01_home/home.asp?id=home Please note that it’s an Aussie invention, so it’s gotta be good!

Gee, I wish we’d had something like this when I was growing up. Kids today, they sure have it easy. Now, when I was a girl…

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