For those FBG's in similar situations, what have you done with your kids regarding money management?
What I did with my godson is instill the values that all resources must be tracked and earned.
I don't believe in "allowance" I do believe in a kid getting some weekly money for basic small expenses in exchange for doing chores or the like. The best way to teach money management is to make the child responsible for something. For example, for several years, my godson, when I felt he was old enough, was responsible for taking the household grocery budget and going out and buying the food for the home. I sent away our full time chef for a while to other duties so my godson had no practical fallback option. If he wanted treats or extras, he had to work that into the budget he was given. So he had to start thinking smart and looking at his options. Buying against the weekly ads, seeing what was on special, using the various rewards and points programs, learning when he had to go early to find the best deals, figuring out how to maximize the clearance areas.
Some things he figured out on his own. Some things he figured out part of the way and needed a few pointers now and then. Some things needed full discussion. But the big issue was the mindset involved. He had to chart the expenditures, where they were going and track how prices were changing. How prices would adjust for seasonal items. Over time, I made the budget smaller and smaller. "Quarterly", if he could show he saved X amount from the budget, then he'd get a "bonus" Show me you can save and accrue the value of 15 dollars a week off the budget for a full year, while not shortchanging the essentials, at the end of the year, you get a 5 thousand dollar bonus to spend any way you like.
You know what he did at the end of the first year? Asked me how he could take that 5K and convert it into something better. Not spend it on video games or clothes or trinkets, but how to invest it. Was very proud of him for that. But the lessons were instilled. Writing it down. Everything. Tracking the expenses. Thinking about how to shift some resources from one area, if there was a small windfall in a good deal, and shift it somewhere else. If it was something like a farmer's market, how to negotiate for a better bulk deal with the owner.
Something he learned was to do without non essentials. Can't squeeze the increased price of X into the budget? Do without it. Or find a way to get it by minimizing cost elsewhere. Something is the best price of the year? Stock up, buy a lot of it. But doing that requires a surplus in reserve, which means avoiding short term gratification over a longer period of time to build up that reserve. Maybe it was cheaper to buy it online, but what about shipping cost? Well you can typically get shipping cost waived if you spend X amount, then how do you spend that amount practically and stay in the budget?
How to teach kids something, IMHO
1) Give them something of consequence. ( Figure it out or if you don't, you won't like what you eat or some other real life daily issue)
2) Give them some agency ( Let them learn from their mistakes, be there to answer questions, see what they can figure out on their own )
3) Give them something to look forward to in their future ( i.e. the point of the "bonus", do a good job, then reward yourself. But not a reward constantly, but a reward that appreciates a long period of discipline, consistency and denying some short term gratification)
4) Give them the responsibility to track and make a schedule and develop some kind of action plan. Then give them the freedom to execute that plan, good or bad. This is fundamentally about problem solving. You want kids to learn early to have a proactive problem solving mindset.
5) Give them challenge. Once I could assess that my godson had a functional "system", I threw in some wrinkles. When I believed he could handle in increase in pressure, I cut the budget. Then I raised the conditions to achieve the "bonus" I made it a "game" Life is a big game. All lessons in life are some fallout and consequence of understanding this "game" better. You want to teach a kid that he can adapt to changing circumstances and use his creativity and aggressiveness to reach a better desired outcome. I made the changes somewhat more difficult but not impossible.
6) Give them the perspective of gratitude. Was it fun to shift away from having a full time chef to powdered milk and some days of constant plain oatmeal? Not really at times. But it helped my godson understand that not everyone got to live like we lived. Not everyone gets to live in a nice house in a nice neighborhood and have their own room and bathroom. Not everyone had the opportunity to travel like we did. Not everyone can hire a tutor for things like English or science for their kid if they need help. Not every child can get into any sport/hobby and get full parental financial support to pursue it. I wanted him to learn to understand what it means when someone says, "We can't afford this" I am very rarely touched by any gesture. I appreciate them but rarely am I sentimental. Well, for one of my birthdays, the kid put together and acquired some things he knew I liked, and cooked a dinner for me. But it required him to give up some treats/extras in the budget from things he liked for himself. That meant a lot to me. More than any nice house or nice car or fancy item. The kid learned to sacrifice some things he wanted against the long haul of a year, in order to shift the resources to do something positive for someone else. But it helped me understand that he was learning how to plan and think ahead. Which were also valuable life lessons.
Aside from those handicapped and some issues with mental illness or when people become elderly, all kids need to learn that a family is like a ship. You are the Captain. And there are no passengers on this ride. Only crew. Everyone has to put in. Even if it's a smaller thing to contribute to start. Money should never be "given", it should be earned or used in the format of a practical life lesson to prepare the child for the cold brutal world after we as parents die.
IMHO, don't "give" your child anything other than practical enduring life lessons. Is it good for a child to have some luxuries? To see an occasional movie with their friends or go out to eat or buy a video game they like? Of course. But it's also important for those kids to learn the "consequence" and "labor" behind those luxuries and extras.
