The Chores Checkbook
Setting your kids on track to be one of tomorrow’s millionaires starts by talking about money at a young age. And teach them skills now, like saving, to help them in the future. Here is a fun idea called “The Chores Checkbook,” which will teach your children one of the most fundamental personal finance skills they need to learn. A chores checkbook is a simple concept and simple to implement.
The Chores Checkbook
One of the most challenging things to get kids to do with an allowance is to save it. If you give your kids their money in cash, it’s effortless for that cash to go in one pocket and out the other in the form of candy, movie tickets, and impulse items at any store checkout line. Trying to get them a real-life checking account is another no-go, even though managing a draft account is one of the most fundamental personal finance skills kids need to learn.
Kids will encounter challenges when they get a job, and a checking account will be the distance between their money and themselves. Letting go of cash is one thing. You can see the money leaving your hand as you get some good or service in exchange. But when it’s swiping a plastic card, the distance between spender and money increases. It’s much easier to be impulsive in those instances, and kids without real-life skills in managing money in this way can be quickly overwhelmed, leading to overdraft fees and troubled credit scenarios.
Experiences
However, there is a way to get that experience while encouraging them to save and appreciate value. Why not become a “personal banker” yourself? Your house’s “First Parental Credit Union” will happily hold money earned for chores, birthday and holiday gifts, and other funds. Whether or not you choose to offer interest is up to you, the president. Kids can make withdrawals for purchases when they need to. It also allows you to see how your kids manage their money.
Keeping track of their account balance should be primarily their responsibility. The method can be as simple as a piece of graph paper on the refrigerator. Or it might be as complex as a shared online spreadsheet. You could even get an actual passbook online and let your child design a custom logo!
Each entry should include the amount, date, and memo, just like an actual checkbook. This practice can give invaluable experience in balancing a checkbook and appreciating the reality of digital funds. Keeping track of their spending habits also gives you a reference when discussing budgeting with your child.
Easy
Keeping a chores checkbook is an easy way to teach money management. It teaches responsibility without radically changing how you and your kids relate to money. Getting on the same page with your child regarding financial matters is a no-risk option. Make balancing the checkbook an activity the whole family can enjoy!
Another fun way to teach your kids about money is by opening a Dollar Dog Kids Club Account (ages 1-12 years) or an iSAVE Teen Club Account (ages 13-17 years)
Thanks Katherine for your comment. The Chores Checkbook is such a wonderful teaching tool. I wish I would have known about it when my kiddos were little!
Great post. I am totally agree with this article. It’s really important for all of us to teach the children to save money in the best possible way. The Chores Checkbook is the one of the best ways to teach the children to save and value It can be also be taught with skillful plays,arts and personal finance management where they must be taught to keep aside a part of their pocket money to use it whenever it is important.