I’m always looking for ways to raise my kids’ appreciation for money. Recently, we started something that has had positive results–we set up checking and savings accounts for our kids in Quicken. The accounts aren’t linked to actual bank accounts–mom and dad keep the money. We track in the checking accounts all incoming funds, including allowance, gifts, and any money they earn. Ten percent of all incoming funds gets transferred to their Quicken savings accounts, eventually to be invested.
As they spend money, we list as the payee a description of what they bought (e.g., candy, clothes, charity). Over time, they can see how they’ve spent their money. And recently, this helped my daughter make a wise financial decision. She had bought a pair of jeans she saw at the store for $25. At the time, she seemed happy with the purchase. When she looked at the $25 flying out of her Quicken checking account and her remaining balance, however, she had second thoughts. In the end, she returned the jeans, having decided that the $25 could be better spend on other things. That’s exactly the kind of choice we are trying to teach our kids.