Money management is not on the school curriculum either. We do teach math and accounting. We do not teach the value of a dollar or how to responsibly handle money. Yet it is a skill that each person needs.

Teaching money management begins at home before children graduate into the world of hard knocks. One of the greatest gifts a child can receive is to be educated and prepared for the time when they will be on their own.

I am sure that there are many ways that you the parent can think of in which to help your child to learn money management. Today, I will share with you a method I used with my daughter. This method is a micro-version of my post on Using A Home Budget To Reduce Debt.

My method came from a day in which I was asked for allowance, school fees and the latest fad pair of jeans. My daughter was 14 at the time. Exasperated, I sat down that night and did a rough estimate of just what it all added up to and decided it was time to begin my daughters money management education.

I purchased a columnar book for her and then we sat down for a mom to daughter talk. I explained that I would be giving her $150 each month for an allowance. Im sure you can just imagine how her eyes lit up. I then took out the columnar book and a box of envelopes.

I explained to her that in order for her to receive the next months allowance, she would have to track her money in the columnar book and keep all receipts. She would only receive the full $150 for what she recorded. Although I did leave $20 leeway for those items you dont get a receipt for. Any other money not accounted for would be deducted from her allowance.

As mom, I agreed to supply the basic school supply list along with basic school clothes, winter and footwear needs. Oh, and all the support and advice she requested. From her $150, she would supply her bus tickets, extra curricular school fees, social activities and extra clothing purchases.
My daughters money management education turned out to be a win-win experience. Over time I noticed a drastic change in her spending habits. Instead of dying if she didnt have the latest fad, the discount store became her favorite haunt. This same daughter attended 5 years of university at her own expense and was student loan free when she graduated.

Ive received many benefits as well. First of all, I wasnt the bad guy. It wasnt me saying she could not have something. She was telling herself. In addition, I saved money. It was cheaper to let her have the $150 a month to work with as her allowance, then it was to continuously pick up the tab for every little thing over the month.

The biggest benefit I received though is priceless to me. I know that my daughter is equipped to make her way in the world and remain financially sound because she has a solid background in money management.

Warmest regards,

SherryD