Parents and Dave Ramsey Fans

[Fletch]

OK, so I'm fixin' to adopt a passel of kids. (I think that's the proper way to say it in Oklahoman)

One of the things we're very concerned with is teaching kids how to handle money -- a topic neither of us received much instruction in.

Dave Ramsey's schedule is something like this:

3 - 6 years old: chores earn crumpled up dollar bills tossed into a clear jar (so it fills up and they can see it)

6 - 12 years old: chores earn dollar bills put in envelopes marked "Spending", "Saving", and "Giving"

13 and up: personal checking account and more responsibility (buying own clothes, etc.)

My question is this: if you were in my shoes, and adopted a 14-year-old (for example) who may not have any clue whatsoever about money, how would you start the process? I'm thinking of starting them in phase 2 for about 6 months or so, then transitioning them to a checking account of their own based on how they absorb the lessons. Something about tossing them right into a checking account worries me, though I can't really put my finger on why.

 

[Lucas156]

Yeah I would go with phase 2 for a while then phase 3 like you said. Not that I know anything but Dave Ramsey rules!

 

[6birds]

My question is this: if you were in my shoes, and adopted a 14-year-old (for example) who may not have any clue whatsoever about money, how would you start the process?

As long as they have a chance to really EARN the money, I think it's ok to let them go broke a time or two, and then miss out on something they might really want (because they wasted the cash on junk).

Discussions on what they might save for helps too, an account full of cash is boring, saving for my fist elk hunt (after college loans where paid off)was COOL!

The tough lessons seem to stick around longer, otherwise he/she is just doing what YOU want, and may change once YOU aren't there to guide them any more(think credit card applications and college campuses).

I hope that helps.

 

[Fletch]

As long as they have a chance to really EARN the money, I think it's ok to let them go broke a time or two, and then miss out on something they might really want (because they wasted the cash on junk).

We've got enough odd jobs around the house and property that we can easily see providing opportunities for the kids to earn a respectable amount of spending cash. 3 acres to mow, dogs to look after, dishes, laundry, cleaning, etc. If they want to earn some money, there'll be ways for them to do so.

I'm not going to just hand out cash without effort though, because I think that teaches bad lessons. I also plan to keep their earning potential below what they could earn at a fast food job or whatever, to give them incentives to go out and get a job of their own when they're old enough.

 

[IndyRobotEng]

I don't think every chore should be paid either. Being part of the family means that there are certain responsibilities that need to get done and it's just expected to do. For us, taking care of the animals, keeping the clothes clean, dishes and such are chores that do not earn money.
Beyond that, I would agree that you should spend some time teaching the basics of saving, spending and giving before adding more responsibility.

 

[Fletch]

I don't think every chore should be paid either. Being part of the family means that there are certain responsibilities that need to get done and it's just expected to do. For us, taking care of the animals, keeping the clothes clean, dishes and such are chores that do not earn money.

I agree with this, but I am inclined to swing more heavily to the side of rewarding work with money rather than not. It comes from having had parents who leaned too far the other way -- pile on the chores, same two bucks a week. It's hard to learn anything about money if you don't have any.

There are things that won't earn money, to be sure, but I'm anxious to teach the lesson that work is an opportunity, not a sentence. It's a lesson that took me far too long to discover as an adult.

 

[Menace67]

Sounds like your one the right path and good for you for adopting and helping someone out. When it comes to money issues Dave Ramsey is awesome. I read his book total money makeover and it opens your eyes to a whole new life and it does work

 

[hornadylnl]

I think parents make the mistake of not sharing their finances with their kids. How are kids ever going to know how a budget works if they aren't taught? How many of us here heard how much money our parents make and thought they were rich? How many of us ever got to see where that money went?

Yes, x amount of money sounds like a fortune. But now, let's subtract the house payment, utility bills, groceries, vehicles, insurance, clothing, yada, yada. After all the bills are paid, this is what's left over. What's left isn't enough to go to chuckie cheese, buy a new bicycle, and buy whatever else you might want. You have to prioritize.

How many people moved out on their own for the first time without ever realizing there was more to being self sufficient than paying rent?

 

[Fenway]

Sounds like a great lesson to start early. I have read Ramsey.... Good stuff!

 

[abnk]

I have a different philosophy on this, which has stemmed from growing up in another country. All earned money is poured into the family figurative pot. Family needs come before anything else. Any personal money that goes to the child is granted by the patriarch at his discretion. Sometimes the kid will work his behind off for no immediate personal reward. Sometimes, he will get a nice reward for very little work if the extra money exists. Obviously, this system requires that the parent is very fair.

I think a quid pro quo system is pretty easy to manipulate. To me it's like buying your children's service and good behavior. I make sure that my kids do stuff because it simply has to be done as a family requirement and it is their duty to do it. They are not necessarily rewarded for it monetarily.

Good luck.

 

[Fletch]

I have a different philosophy on this, which has stemmed from growing up in another country. All earned money is poured into the family figurative pot. Family needs come before anything else. Any personal money that goes to the child is granted by the patriarch at his discretion. Sometimes the kid will work his behind off for no immediate personal reward. Sometimes, he will get a nice reward for very little work if the extra money exists. Obviously, this system requires that the parent is very fair.

I think a quid pro quo system is pretty easy to manipulate. To me it's like buying your children's service and good behavior. I make sure that my kids do stuff because it simply has to be done as a family requirement and it is their duty to do it. They are not necessarily rewarded for it monetarily.

Good luck.

I can see this as a valid cultural approach, but I won't adopt it for two reasons: first, it's completely alien to my culture, and second, it's very likely to be completely alien to the kids' culture. I have no doubt it works very well for those raised in it, but neither I nor my adopted children will have had any personal experience with this approach. I already know the adoption will be a tough endeavor on its own, and I'd rather not complicate it by artificially adopting a set of standards I don't know.

 

[Drako]

My parents (with my younger siblings) do give money for chores; extra chores in addition to 'responsibilities' if the kids want to buy something. So they have the ability to make money

But they also do stickers for rewards. If you do your responsibilities then you get a sticker for that day. A whole week of stickers and you get to do something special....aka go out for ice cream, or a movie or etc..... It works in our house

 

[Hotdoger]

I have a different philosophy on this, which has stemmed from growing up in another country. All earned money is poured into the family figurative pot. Family needs come before anything else. Any personal money that goes to the child is granted by the patriarch at his discretion. Sometimes the kid will work his behind off for no immediate personal reward. Sometimes, he will get a nice reward for very little work if the extra money exists. Obviously, this system requires that the parent is very fair.

I think a quid pro quo system is pretty easy to manipulate. To me it's like buying your children's service and good behavior. I make sure that my kids do stuff because it simply has to be done as a family requirement and it is their duty to do it. They are not necessarily rewarded for it monetarily.

Good luck.

Sounds like my SILs family from Korea.