The Family Economy

I have been stressing and fretting for quite some time now about how to teach my children to become responsible contributing members to society.  I worry that they will continue through life with the same sense of entitlement that the rest of today's youth seems to have.  I'm sorry young people but you do not have the RIGHT to an education, you have to work for it! Seeing the government handouts and bail outs teaches my kids that you don't have to work hard to live comfortably and that is the wrong message to send. I believe that there is pride in a job well done and a sense of achievement is important in developing a sense of self worth.  I have observed in my own home that when my kids work for something and have to use their own money they actually take care of it and if something happens to it the devastation is so much greater.  When it's something that mom and dad bought then hey..."mom and dad will just buy me a new one or pay to fix it."


I also am sick and tired of fighting with my kids to clean up after themselves and contribute to this household.  Add that to the fact that my kids have NO concept of how money works (which I didn't really have a good understanding of savings, credit and interest and all that jazz either, but if I had, who knows where I would be today.)  I have heard it said The smart man earns interest and the stupid man pays it.  I want my kids to be the smart one and earn interest!!

Now don't get me wrong, I don't believe in giving kids an allowance for chores, it is there responsibility  to make this household run and functions smoothly.  I have to buy my kids clothes and pay for their school trips or a new basketball for practice.  By contributing to the house then they can earn money to buy those things.  I would start a college fund or mission fund with with money I am giving my kids but the money that will go into savings from their allowance will pay for those things (hopefully)

Now I hesitate to even put this out there for fear of it not happening and coming crashing down in a ball of flames but I have been barraged with comments and texts to see close ups of our new Family Economy System. So here it goes.

It starts with the zones which we will rotate thorough each week.

I have made a detailed description of what is involved in maintaining their zone so there is no question about what is part of their job.

Each child has a check list that has to be initialed at the end of each day and filled at the end of the week.  

The 4 categories that need to be checked of each day have also been outlined so there is no questions as to what is expected and entailed in those categories.  

At our Sunday night trip to the "Bank" the children will receive their money.  One dollar for each year of life (except for Colby because in years past we have given the opportunity to earn $10 and I don't feel I can go back on that)  We then implement the 10-20-70 division of their money.  

10% - goes to tithing (you can read more about this here)
20% - goes into savings, that they cannot touch until mission or college
70% - goes to what ever they choose to spend it on but they will be buying most of what they need (clothing, gifts for friends, trips to the movies and so on)

We want to help them learn about compound interest and why it is important to save so we will be helping them grow their money by adding 10% to what ever is in their savings "account" each quarter. Now this is where my kids got really excited about this plan.  They know that because of certain life events there is no college fund as of right now.  So they will need to save and we are helping them do it.  It is a great way for them to see how saving and not spending your money can benefit you in the long run!  Brett will be turning 16 in just a little over a year and I'm sure he is going to want a car, and gas to put in it.  Society has gotten to the point where they won't give a job to a teenager (don't even get me started on this) so how will my kids ever have a chance to earn money for these things!    

Now I feel I must give credit where credit is due, I did not come up with this plan on my own.  I had seen it over on Shawni's blog, to which I quickly ordered her parents book where the whole thing is outlined, Three Steps to a Stronger Family.  I knew from the moment I saw it that it was an answer to my prayers, (I told you I have been stressing about this for some time)  and Terry jumped on board with full force.  We went on a drive to run some errands and outlined the whole plan to get it in place and told the kids about it last night at a family meeting.  The kids are super excited about it and we are too.  I pray that we can stick with it and that my kids will never get into money trouble as adults because they were able to learn at a young age!


Shari said...

We just did the outline of our zones, etc last night and scheduled our family meeting for tonight. :) LOVE that book, as well as Shawni's blog. It's a long time favorite of mine. Good luck!!!

ZeldaMom said...

Wow, good for you!
The only way this won't work, is if you and your husband give in .I found that was my problem, I would feel sorry for them and hand out money, but something must have worked, because they are all out of the house and managing all their bills and till having some fun.

Heidi said...

This post, along with the post of Shawni's you linked to is an answer to my prayers. I read the Eyre's book The Entitlement Trap this summer and wanted desperately to implement the family economy when school started. However I couldn't quite figure out the right way to go about it. I'm a visual person and after reading your experience and seeing your charts I now know what I need to do to get this started in our house. I am literally at my wits end with the way things are going in our house and something has got to change before I have a nervous breakdown!!! Best of luck to us all!