In the previous post I talked, perhaps more accurately, got on my soapbox about how crucial it is to teach our kids to handle money. Learning real life money skills can and ideally should start at an early age, but if it hasn’t, it’s never too late to start, even at the high school (or adult) level.

Let me share with you some practical things we have been doing to learn about and improve our real life money skills that might give you some ideas for your family. (As a side note, this has become a learning process for our entire family )

Responsibility for purchases

The first thing we did was give each of our teens their clothing budget money – the amount we would have spent on them – and let them manage it.

Lessons learned:

• How fast it could go – looked like a lot of bucks at first, but went very quickly
• How to shop smarter and stretch the money
  • Now they check out sale racks first
  • Don’t buy anything if it’s not on sale
  • When they have time, they shop at thrift stores.
• Brand names aren’t worth the price tag
• Shock at the amount of money some of their friends spend on clothes & how important brand names are to them

Checking Account

One of the next things we did was open up a checking account.

Lessons learned:

• The process of opening an account
• How to write checks & enter them into the register
• How much the checks themselves cost
• How to make deposits and withdrawals
• How to balance their checkbook
• Fees involved, (including hidden fees that were not mentioned and discovered the hard way)
• The cost of being careless, i.e., forgetting to register a check or debit card purchase
• Use of a debit card & how quickly those $10 debit card withdrawals add up with no idea of what the money was spent on
• How easy it is to overspend and perhaps overdraw the account & how costly overdrafts can be
• How to talk to bank employees about charges they don’t understand
• How to safely use online banking features

Budget

The next step we took was to setup a basic budget, adding to it as they understanding and ability to manage it grew.

Lessons learned:

• Discipline & Accountability
• A budget is fluid, meaning that circumstances change and budgets must be adjusted to reflect the changes
• When the money’s gone, it’s gone. Money trees are a myth (Sorry, but it’s true ).
• How much things like gas, insurance, and car maintenance and repairs cost
• Setting goals & priorities – the dollar can only stretch so far and choices need to be made
• The value of saving for goals, emergencies, etc
• Using a spreadsheet – we started with a notebook, but as the budget became bigger and more complex, we are beginning to learn about spreadsheets. (Perk – counts toward computer skills)
• Freedom – it is freeing to know you’ll have the money you need when you need it.

Taking a Course about Money Management

We, as in the whole family have been taking Dave Ramsey’s Financial Peace University course which our church just began offering. Great course -  At this point, three weeks into it, I highly recommend it.

Lessons learned:

• More about the benefits of budgeting and saving
• Credit Cards – the pros & cons
• Debt
  • How easy it is to get into debt, especially credit card debt
  • How devastating debt can be to a marriage (#1 reason for divorce!)
  • The stress debt creates, eventually affecting every area of life
  • Overspending to the point of chronic debt is a symptom of a deeper problem

Family Budget Meeting

For the first time, we sat down as a family and looked at the family budget. Very eye opening, especially for the kids.

Lessons learned:

• It’s expensive to live
• It takes discipline to live within your means
• Reinforced – Budgets need to be regularly reviewed and adjusted
• Great discussion about areas to cut and ways to save more
• We (the adults) don’t always do it right; we make mistakes too

Other Miscellaneous Real Life Money Skill Lessons

Unit pricing: Being able to figure out which item is actually the better deal.

Making Change

Knowing how to make change without depending on a computer and knowing if they received the correct amount of change.

Personal Pet Peeve: Have you noticed, as I have, how many people, especially youth, cannot make change without the register telling them? They have no clue how to figure it out on their own (or how to count it back to you).

For example: you make a purchase for some amount, say $2.06. You hand the cashier a $5 bill, they ring it up, look at the register to find out how much change they owe you. Then… you throw them for a loop, and say, “Oh, I’ve got a dime.”  because you really don’t want 94 cents in change.

If they have already punched the numbers into the computer, they literally don’t know what to do with the dime you are offering. Their mouths drop open, they keep repeating “Ah.”, “Ah.”, “Ah.” and just stare at the register. Finally you say, “never mind, just forget the dime”.

I actually had one cashier brave enough after several “Ah’s” look at me and say, “I don’t know how to do that.”

It’s sad, really sad I think, and even shameful that this country is graduating kids who can’t make change without the use of a register. Okay, I’m done with my rant.

We haven’t started on the “Making Change” yet, but I guarantee I’ll be bringing out the change jar and Monopoly money soon and we will know how to make change the good old fashioned way and how to count it back. After all, in this homeschool, it will be a requirement for graduation

There you have it – these are the tools & opportunities we have been using to teach our teens real life money skills. As a result, our entire family is learning how to be better stewards of the finances God has blessed us with and one of the greatest benefits we are reaping is a deeper level of closeness as a family unit.

What have you been doing to teach your highschooler (or any age) about real life money management? I’d love to know!

This entry was posted on Friday, February 6th, 2009 at 1:07 pm and is filed under Life Lessons. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.