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Wednesday, November 9, 2011

Money Lessons for Kids Part 2



As you may have seen in a post last year, we started giving my 11 year old daughter necessity money.  A couple things have been added to that list now that she's growing up and her budget has been accounted for  those things.  Here's the post in case you missed it.

She is now 12 years old and in 7th grade.  Her math book has her going over budgets, writing checks, interest rates, etc... I'm very glad they go over this but I wanted to take it a step further.  We are making up a budget for Allysha as if she's 18 years old and working at a regular job - McDonalds, Walmart, etc... right out of high school.

Step 1:
I told her how much money she'd probably be bringing home and we figured that'd be $800 per month.

Step 2:
I asked her if she wanted to live at home or on her own at that point.  She chose at home.

Step 3:
She figured out what she wanted to have and what she thought was necessary.

Step 4:
We then looked into the things she wanted/needed like a car, cell phone, etc... I showed her real car ads, real phone plans, etc...

Step 5:
We figured out a plan that she is comfortable with and the cell phone was just not in the budget.

Step 6:
We're going to play a game kind of like the game of life.  I'll tell her which month we're on and she'll pull a paper out of a hat.  It may have something like "you just got into a car accident, pay $500 deductable", "Your friend asked you to be a bridesmaid in her wedding.  You need to pay $300 for your dress and alterations", etc...  Each time something like this happens, she is going to have to figure out a way to adjust her budget to compensate for the catastrophes.

Step 7:
We're going to move on into the age of 24 and her getting married.  How getting married and working/not working impacts her budget.  And of course we'll throw a pregnancy in there along with other things that life throws our way.  (please don't think I think babies are a burden - they are a blessing indeed!).  We will see if a realtor is willing to work with us and take us to a few houses in the area that are within her "budget".

I'm hoping this will give her a much better idea of what life is like - at least as close as she can get without actually living it.  I'm hoping this will cause her to think more as she gets older.  But, if she does make mistakes, she will still have this to look back on and remember.

Do you do something similar to this?

Oh and in case you were wondering, she picked a 1999 Pontiac Grand Prix that just had a new transmission put in and with warranty.  It has 170,000 miles on it and is in great running condition.  It is local and is listed at $2,800.  The actual picture from the ad is above.

1 comment:

Nikki/CGBee said...

Mandi!

This is such a wonderful idea! We tried to "prepare" out teenage daughter for real life with a necessities fund and budget each month, but this just takes all of that one step further to truly spot light life "out there"! I will be keeping this in mind when outs get a little older, too bad it's so far away, I hope I don't forget! :)