One mom hopes to teach her five-year-old daughter the value of money by charging her rent – and her approach has people divided.
Essence Evans of Atlanta, Ga., revealed her strategy to other parents by posting a message on Facebook over the weekend.
The mom explained that every week her daughter gets a US$7 allowance – US$5 of which goes back to mom for things like rent, water, electricity, cable, and food.
“But I explained to her that in the real world most people spend most of their paycheck on bills with little to spend on themselves,” Evans wrote.
But what Evans explained was that the US$5 her daughter gives back is actually going into a savings account that will be given back to her daughter when she turns 18.
“So if she decides to move out on her own she will have US$3,380 to start off,” Evans explains. “This strategy not only prepares your child for the real world. But when they see how much real bills are they will appreciate you for giving them a huge discount.”
Some people applauded the mom for her efforts.
“I think it’s a good way of teaching your child how to manage money, and to pay bills first, and then what’s left over is play money,” wrote Facebook user Kathy Galloway. “This will make them more responsible for their own money… Good job Mom!!!”
“I think this is absolutely brilliant,” Angela Michelle Sherman said. “I need to do this too.”
Others, however, thought it might be too soon for the five year old to learn about finances.
For parenting expert Ann Douglas, she can she Evans’ idea is done out of the best of intentions, but also fears it may be too soon to teach her daughter.
“She wants to ensure that her five-year-old grows up understanding how money works,” she says. “But I wonder if there will be some unintended consequences resulting from her decision to charge her child token amounts for rent and other household expenditures, starting at the tender age of five.”
Douglas wonders if the child will grow up thinking that she has to pay her way, even while she’s still a kid, and that she can’t rely on other people for support.
“What message does that give her about being part of a family: that your family is here for her – but only if you pay your way?” Douglas asks. “And how will the daughter make sense of that surprise windfall at age 18?”
Instead, Douglas says the appropriate time for children to start learning about money is when they’re old enough to observe what you’re doing with your finances – and that age can vary depending on the child and family.
“It’s important for kids to have some money of their own so that they can practise making their own decisions about money early on,” she says. “It’s better for them to make mistakes with small amounts of cash than waiting for them to make much bigger mistakes with much bigger ticket items down the road.”
So what can parents do in their quest to teach their children about money?
First, help your kids understand what money is, how it works and how we can make it work for – and not against – us, Douglas says.
Talk about your own experiences with money – how you think about money today and what you’ve learned along the way.
Also, give your kids a peek behind the curtain, Douglas advises. Talk about the processes you go through, in your own head, when you’re making decisions about money.
“As they get older, give them some real-world opportunities to practise their money management and budgeting skills, like helping you to plan a family trip with a particular budget figure in mind,” Douglas suggests. “They’ll quickly discover that managing money is all about making choices.”
Lastly, make sure that the approach you take to teaching your child about money lines up with both your values and your parenting philosophies.