A mother is doing all she can to ensure that her kids will have a healthy relationship with their money by introducing them to basic financial concepts and situations at a young age.
Even though she breaks it down in a way their little minds can comprehend, she is giving them an important life lesson we all could have used when we were this young!
The mom, Makenzierevealed the teaching strategies she uses for her 7 and 4-year-old kids in a TikTok video. According to Makenize, each of the kids has their very own “banks” (which are just envelope binders equipped with three sections). The sections of the binder are divided into checking, savings, and bills.
“They have two bills that they have to pay each month. It’s due on the last day of the month…” she explained. “$1 for food and $1 for housing. It goes into their savings account.”
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The kids start off every week with $5. For every chore they do not complete, Makenzie takes away 25 cents. “The thought is if you go to work, you get paid. If you don’t go to work, you don’t get paid,” she said. Makenzie added that this is a new system in her household, and she is giving grace to her kids if they happen to miss a chore or a “payment.”
For now, she only wants her kids to start building a healthy relationship with money, something she was never taught. “I know I don’t have a healthy relationship with money ’cause I was never taught how to manage it,” she explained.
Makenzie shared a follow-up video depicting what a typical “payday” looks like at the beginning of each week when the kids get their $5. She allowed them to decide how much of it they wanted to put in their “savings” or “checking” account.
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“This is a fantastic setup! A great financial literacy foundation,” one TikTok user commented. “My mother taught me how to balance and keep a check register young, and I still do it 40 years later. This isn’t taught in schools anymore and should be. Fantastic job!!” another user wrote.
Some people may believe that teaching kids about money may be useless since they do not actually have bills to pay. However, data suggests otherwise.
A 2020 study found that 18-to-21-year-olds were at least 40% less likely to fall a month behind on payments to credit accounts if they had three years of financial literacy education in high school. Those same people also had credit scores that were 25 points higher than their peers.
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When kids learn to budget, save, invest, and manage debt at a young age, it is less of a daunting task for them to complete when they reach the age where they will need to pay rent and manage their credit. They will also know how to save effectively and have a heightened awareness of what they can and cannot afford, helping them avoid falling into debt.
Parents do not even have to go above and beyond to make their children more financially aware. Just the concept of an allowance teaches them about responsibility and earning their keep!
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Megan Quinn is a staff writer with a bachelor’s degree in English and a minor in Creative Writing. She covers news and lifestyle topics that focus on justice in the workplace, personal relationships, parenting debates, and the human experience.
