By Ralphie Jacobs
Every time I teach the principle of a Family Economy, parents can hardly contain themselves. Questions begin to fly, phones come out taking pictures of everything that I have on the board, and they're on the edge of their seats dying to take the ideas home in their pocket.
Why? Because a family economy is the answer! To so many questions! How can I teach my child true gratitude? What do I do to get her motivated enough to pitch in? Am I always going to have whining, needy kids at the grocery store?
If you want a one stop shop, here it is.
1.First of all, what is a family economy?
A family economy is a work and pay system. The best family economies are built by parents who use their strengths to create it. Each one will and should look different. The most important thing is to take the money you are already spending on your children and reroute it through their choices. The goal is to create a safe microcosm of the real world at home through lots of purposeful opportunities to earn, spend, save, and give that money.
2. Why is a family economy important?
Children thrive on responsibility because it leads to ownership. Ownership not only gives your child choice and a feeling of empowerment, but it’s also the antidote to entitlement (can I get a hallelujah?). Lots of mini life’s lessons are learned in a loving, supportive environment where the stakes are low and the timing is perfect. Plus, you get to be the parent that says yes. “Yes, you can have that! Did you bring your money?”
Don’t be mistaken though! A family economy is not just about money. Money becomes the vehicle for lots of character building and value teaching. Values such as true gratitude, goal setting, honesty, self-reliance, dependability, delayed gratification, and on and on.
3. How much maintenance does it take to keep the economy going?
Once the family economy is implemented it only takes about 15 minutes per week to keep it going.
4. How old should our children be to start the family economy?
It’s best to start the economy when your child is about 5 years old. Keep it simple and add elements as you go. Elementary is the perfect age because they are still thrilled with adult-like responsibility and they have the ability to do it. Before they are 5, try simple things like quarters in a jar for tasks accomplished.
5. How do we introduce the economy to our children?
A family meeting is the best place to introduce the economy. Make it special by having treats and showing how excited you are for them to be a part of something so neat.
6. When do you do payday?
The work week for our children is Monday through Friday and they are paid on Saturday.
7. Do you pay for all the chores you ask your children to do?
No, the family economy applies to a limited number of things. There are many things that our children do in our home that they are not paid for such as Saturday morning chores and after dinner jobs.
8. Is the economy optional for your children?
Yes, it is always optional. I have had a child too stressed with life to “come to work”. She needs a sick week. And that’s perfectly fine. This is a highly self reinforcing system though. As soon as she sees sisters adding to their bank accounts, she’s ready to jump in the next week. We do ask our children to always do their homework and practice piano. Those are not optional.
9. What are the chores that you pay for?
Morning: Make their bed. Get ready for school. Clean up breakfast. Come to scripture study on time.
Afternoon: Get ready for the next day, Piano, Homework
Zone: The home is split into 4 sections and each section has a specific daily job.
Reading: Read 30 minutes
10. How do you make sure they are accountable day by day?
We ask them to check each box on their weekly log that they have completed and have me sign it within 24 hours.
11. How do you determine how much they get paid?
Our children are paid their age. This works really well because as they age, they are asked to have more responsibility in the form of expenses.
The children have a possible of 20 points to earn each week (4 per day). If they get 18 and above they get the full amount. If they get 16-17 they need to memorize a quote or poem before they can get the full amount. If they get 15 and below they can still get a dollar for each day that they complete all 4. We do the last one because we want our children to always feel like they can redeem themselves and finish strong.
12. What form of payment do you give?
Because we didn’t want our children losing their cash, we add their increase to a (virtual) checking account balance. They use check registers to keep track of deposits and withdrawals and write fake checks if they want something at the store. I then pay for the item with my credit card.
13. Do your children miss having cash?
No. They love having their purses with their checkbooks in them. If they ever want cash, they can write a check to cash.
14. How do you increase their responsibility as they get older?
We ask our children to pay for all of their wants excluding clothing once they turn 5. This may sound crazy, but remember that the wants of a 5-7 year old are usually very simple, and truly they love that control! At 8, they pay for half of their clothes, and at 12 they pay for everything, excluding underclothes and family sponsored outings. Once our children are 15, they will open a real checking account with a debit card.
Again, if this is new, it sounds crazy. But I can’t tell you how grateful my children are for a birthday present of new shoes, how good they are at delayed gratification because they have to save up for things, and how eager they are to buy something for someone else because they get how wonderful it feels to give and be given to.
15. How do you encourage them to put money into savings?
We do the 10, 30, 60 rule. 10% goes to charity, 30% to savings, and 60% to checking. They are asked to put AT LEAST 30% into savings but often do more. The reason being that we pay 10% interest quarterly. Best. Bank. Ever. They understand that savings money is untouchable until they have graduated for high school.
16. Do you have ways for your children to earn more money?
No, we let them use their amazing talents and skills to come up with ways on their own. And believe me, they are far better. For example, the girls decided to organize and run day camps to meet a financial goal.
17. How do you encourage them to take ownership of their accounts?
We ask our kids to sit down on payday and do all of the math on paper, ask “the banker” if it’s correct and then write it all down in their registers. They also have wish lists that they put in their checkbooks to help them set goals and think things through when they are at the store.
18. How can I learn more about the family economy and parenting with purpose?
Great question! Come and connect with me on Instagram @simplyonpurpose. Ask questions there and ask them here. I do my very best to connect with everyone who makes the effort to reach out.
Do you have a family economy system in your home?
Tell us about it in the comments!
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