I half joke with my two girls that I won’t let them leave my home until they have fully graduated in all the skills they need to tackle life on their own.

Graduation means being educated on how to manage money. But how do we do this in practice? It seems that very few schools teach practical money management and most parents don’t know what to do.

Some practical suggestions

So here are some helpful tips that I’ve found work a treat.

• I don’t like an “entitlements” mentality. The mentality that says “I exist, therefore I deserve”. I don’t think this mentality is healthy. Therefore in my family my daughters only get pocket money if they earn it.
• My wife Rachelle and I have put up a chart in our pantry that lists a whole range of household tasks that my daughters can do to earn their pocket money. If they don’t work, they don’t earn… much like the “real world”.
• Having the list of household tasks and the amount they can earn is a motivator. It’s a win/win – we get more work done around the house and they earn some money doing it.
• If you want to get your kids even more motivated, help them set some savings goals to buy things that they want. Break it down for them and help them understand how long it will take them to save for that special item.
• Setting medium term goals teaches delayed gratification… and delayed gratification is a sign of maturity and a wonderful lesson to learn with regards to finances.
• On pay day we pay the girls in cash. The reason we pay cash is so that they can then allocate their earnings to three envelopes. These envelopes are titled – Giving, Saving and Spending. I want my girls to form good money habits and this envelop system encourages time-proven habits for financial success.
• They must put cash into each of the envelopes each time they are paid. They determine how much goes into each envelope, but each envelop must receive some cash.
• Another envelop they have is named “clothes”. This envelope receives an allocation from the family budget, in cash, every pay. We give the girls their budgeted clothing allocation and then it is their responsibility to manage this clothing budget themselves.
• We figured getting this allocation into their hands to manage would provide a number of teaching moments, as they got things wrong, and as they got things right. We were right. The girls on the whole have done an amazing job with managing their clothing budget and have provided the really positive surprises and given us, their parents, some great opportunities to say “well done”.

So if you’re having trouble getting your kids to do their share of work around the house, then give this a go and see what happens

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