My Foundation for Earning and Saving

by Tasha Danielle, CPA & Founder of Financial Garden

At the tender age of 7 I was already earning & saving money!

I grew up in a single parent household. My mom, who I adore, raised my two brothers and I after separating from my Dad. She taught me many things about financial literacy very early on. Saving the money I earned was consistently a topic. My mom paid my older brother and I small allowance of $5.00 every two weeks for chores that were completed timely. Even though I was only 7 years old I can remember her posting our daily chore schedule on a piece of paper in the kitchen! It’s funny thinking back on it today, Wednesday’s were my favorite- I was responsible for dusting the house before bedtime. She even had checks and balances in place!

I had to check chores off the list daily as they were completed and my mom would check behind it. If incomplete my allowance was docked by 50 cents! Needless to say, I did not have the option to procrastinate! There was no waiting until the end of the two weeks to finish everything if I wanted to collect my allowance. My mom even created an incentive to steal a chore from the sibling that didn’t complete a chore on time. So if I didn’t complete my dusting on Wednesday, my brother could steal it and have it added to his allowance! My mom wanted us to understand the importance of earning money at an early age.

In my early years, we lived in an apartment building with a corner store attached to it that claimed most of my older brother’s allowance! The corner store received some of my allowances however, I tended to save my money until we went to what I considered a “real store”. F&M Drugstore & KB Toys is where I liked to spend my earnings. My mom noticed we were spending every dollar we earned and she wanted to encourage us to save. She created an incentive for my brother and I. If my brother or I saved at least half 

of our bi-weekly allowance, my mom would give us an extra dollar. She increased the incentive if we managed to save more than half of our allowance! The saving incentive was also tracked in our kitchen on a piece of paper that hung to the wall. It prompted a little friendly competition between my brother and I on who could save the most. I remember saving so much that my mom had to change the incentive! This was the foundation for me being able to set financial goals and achieve them.

Talking to your kids about money doesn’t have to be taboo. My mom created an environment that taught my brother and I about earning and saving money. As such, the money conversation came up at least weekly as early as the age of 7! You may not feel it’s necessary to pay a child to clean up around the house and that is perfectly fine, but a child must have an opportunity to make financial decisions.

Here are 3 things to consider:

1. Earned and Unearned Money

If your child does not earn a weekly or bi-weekly allowance, consider awarding a small financial token for their birthday or for good grades on their report card and let them determine how to spend it. This will give your child some exposure to making their own financial decisions. According to National Standards, by Kindergarten children should understand that spending, saving and sharing are ways to use money.

2. Why Save???

My mother created an incentive for my brother and I to save. I encourage you to set a savings goal with your child for an item that they really desire at a price that would take only 3-4 weeks to save for. Children should understand that saving is a choice not to spend money today, in order to buy something in the future. Many students that I work with in the beginning of Financial Garden say that people should save. When I ask why should people save, early elementary students have a hard time explaining why.

3. Set the Example

Though my mom taught the importance of earning and saving, she did not personally model saving to my brothers and I. For me it was my grandmother who modeled positive financial behavior and I learned so much from her as well. Studies have shown that children learn best from modeled behavior. With that said it may be a good idea to share a household item that you’re saving for. For example, you could be saving for new pots and pans. Put a jar in a common area and drop money into the jar and explain the progress being made to your children. This provides them the opportunity to see you work toward a financial goal.

Please share any saving goals that you and your child have set!