Last summer, we did a refresher post on Chores and Teaching Money Management. In mine and Mary’s households, we wanted to build in some type of money management structure because how money is handled now is vastly different than it was 30 years ago.
First, we don’t carry cash. I’m not actually sure how my kids think paying by card works. Any cash they directly receive comes from gifts and goes into a piggybank.
Second, I rarely give my kids the opportunity to spend money. That means, they don’t come with me running errands or stopping at Target. Whenever we do go shopping, or if we’re on vacation and they have the option to get a souvenir, they want EVERYTHING!!!
Obviously, how kids learn about money is going to be different from family to family. Learning about money management in school is also generally reserved for older kids. I remember a field trip we took in 8th grade about picking a job with a set salary and you had to make it through the month watching your budget and balancing your checkbook.
Through my work email, I got a Substack invite from Dr. Stephen Day, a Professor at Virginia Commonwealth University and Director of the VCU Center for Economic Education. He was hosting a webinar on how to use Bluey to teach kids economics. I loved this approach and his writing topics, so signed up for another webinar on Mini-Economy at Home.
Mini-Economy (or some versions of it) is generally used by school teachers. You create a class-specific currency (Schrute bucks, Stanley Nickels, etc. You could use the money from an old Monopoly game). Then you create a list of jobs and assign a set fee for each one. Pretty straightforward.
Then, you the parent creates a mini-store: things that you have already approved for the kids to spend their earnings on. This could be treats and candy, more screen time, a weekend field trip, etc. The mini-store is only open once a week (or how often you’d like), so the kids have opportunities to save and plan.
Working from this basic structure, you can also work in any additional rules that fit with your family’s framework. Dr. Day talked about how part of his kids’ earnings is automatically put into “savings” so they aren’t allowed to spend all of their earnings at one time. A small set amount is also taken out for charity like an offering at church. He also has “insurance” that the kids can buy so that if a toy or something breaks, they can decide to use their insurance to replace the toy. Again, this is all mini-sized and we’re not using real dollars.
On the surface, you can see how this works great in classrooms; everyone has a class job, they earn points through effort and behavior, and the rewards are candy, or bringing a stuffie to class, or have lunch with the teacher (which my kids love). But at home, there is much more of an emphasis on saving and understanding motivation. It also requires parents to stick to the system. Open up conversation and let kids lean into their personal responsibilities.
What I liked about this system
It doesn’t include things that kids should already be doing.
You don’t have to give allowance/rewards/payment for things like brushing teeth or keeping their personal space clean. The paid jobs serve the whole household.
It leaves room for Gig Economy.
A concept I liked that I ran into on TikTok was the concept of gigging for kids. If the kids want to help us work in the yard, or they have an idea for a bigger, one-time project like organizing the basement, we can set a one-time payment for that work without assigning it as a daily chore. Examples are helping fold laundry, stamping and labeling holiday cards, taking down holiday decorations.
It’s not year-round.
Dr. Day talks about how he does not have a mini-economy setup during the school year because everyone’s schedule is too loaded to make the mini-economy consistent. My thought is I would activate it during the summer.
It helps shape financial habits
The girls have really gotten into video games since last year, so we find we aren’t dealing with as many requests for dolls or things that can be disposable. This brings in quality over quantity, and clutter vs. things that have clear purpose. This spills over into our bigger habits as a family. This Christmas, there was much less “stuff”. Instead, the girls were happy with money that was allocated toward ski lessons, or puzzle for the whole family. This speaks to motivation and value.
Other thoughts
In The Opposite of Spoiled: Raising Kids Who are Grounded, Generous and Smart about Money, one of the main points is that you are not giving kids allowance because of the work. A lot of parents get hung up on paying for chores because many kids chores are things they should be doing as a responsible family member anyway. I don’t get paid for doing dishes, it something that must get done. Instead, you are giving them opportunities to EARN. I can impose that doing chores is effort, and money is the reward for effort.
Saving has also been a big topic of discussion in our home. So now when they receive birthday money, they have the option of earmarking it for something or putting it in the piggy bank which we periodically deposit into a High-Yield savings account. We give them quarterly updates on these and their college accounts so they can see how much we’ve allocated, how much interest its earned, and the projected amount by the time they graduate.
If they choose to spend money, then we have the conversation of what they want to buy, is there something bigger or more valuable that they could put it towards, and how happy they think their purchase will make them. This is where I try to bring up past examples of other toys they have and compare. I also try to get them to see the value in what they already have and if they no longer see that valuable, then am I okay to donate it. This definitely changes perspectives on how they treat their existing “assets”.
If you want more ideas on kids and financial knowledge, I recommend Dr. Day’s Substack Paper Robots. I’ve also linked a YouTube recording on setting up a Mini-Economy.
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