We've started a new allowance system

My friends were wondering which financial book to go through with their kids: Dave Ramsey's or Crown Financial Ministries'.

Here are my $.02. You can take it for what it's worth. (pun intended).

Why not do both programs with your kids? Dave Ramsey is respected in the christian community as well as Crown Financial Ministries. In fact, Dave's ideas were formed in part by Larry Burkett. Both Dave and Crown have books for kids. Your kids will need to learn this stuff over a long period of time. Just like us, they need to hear and learn these principles on money more than once.

We started a "living" lesson on finances with our kids--5, 7, 9 y.o. I say "living" because we've designed it so that it is real to life (with a ledger system, moneys that bare interest, and money allocation, etc.).

Our kids DO earn money for specific chores because it is what's real to life--people earn to make a living. And because when you talk to any child psychologist or behaviorist, they will tell you that this form of operant conditioning (which includes reinforcement, punishment, and extinction) is natural and very successful--it happens whether you realize it not. So learn to use it to your advantage as their teacher. And, this type of learning is true to CM, as well (consider her ideas/studies on "habits"). In this case, the term for operant conditioning or creating "habits" is a "token-based economy".

Our kids also get an allowance for several reasons; one of which is the fact that a token-based economy only works if it's "worth it" to the kids. Earning tickets or marbles in a jar does not work for older kids past the initial onslaught--the system is too basic and the token is too abstract from real life. Also, we see this "allowance" as a gift of steady income from parent to child. Don't we do this already, unawares? Eventually they will have to learn that an "allowance" won't always be there in the same way and they'll have to earn their own steady income (when they get a job as a teen or create their own business as a young entrepreneur). Even so, I've seen parents make "allowances" when they want to help their grown kids buy a house or car, or get back on their feet--it's never real gone, just different.


To learn more about how we do it, read:

Our Allowance System: New and Improved
via fivecentnickel.com by nickel on 5/16/08


AND

From Crown Financial Ministries, read about the six areas of financial teaching that parents need to adopt as their primary focus: income, budgeting, saving, debt, tithing, and giving.