Friday is payday in the Alphonso household. That’s when Ryan, 10, and Brianne, 8, collect payment from their parents, Stacey and Richard, for having completed their chores. The children are given coupons worth $1, $2, or $5, which can then be redeemed for cash. Stacey, 37, and Richard, 38, implemented the coupon system to keep track of payments. “Ryan is like Alex Keaton [of the sitcom Family Ties] and he was always claiming that we owed him money,” Stacey says. “With the coupons, it’s easier to monitor things.”
The coupon system also allows Stacey and Richard to teach their children how to exercise virtually the same responsibility they would with cash. Ryan and Brianne have to keep their coupons safe, and once they redeem them, they determine how much to tithe to church and how much to save. Their mother offers guidance, but ultimately she lets the children make the decision for themselves. “It’s better [they] learn this way so that money management becomes second nature; that way they don’t have to figure these things out later on in life.”
Brianne says the first thing she does is put away 10% for tithes. She buys small things like candy, but explains, “My mom has talked to us about saving, and so I put my money away so that I can buy bigger things once I have enough [to pay for them].”
Stacey uses the coupon system to teach Ryan and Brianne a number of life skills. Ryan initially sat down with his parents to negotiate a pay rate. He gets $2 a week for collecting and taking out the trash, and another $1 if he has to walk the dog. The beauty of it all is that reality hits home. Ryan gripes: “I think I should get $4 a week for the trash because it smells so bad.”
Some lessons the children learn are tough to swallow. Ryan recently took $6 worth of coupons to the mall and lost them. He then expected his mother to replace them, but she refused. “I told him that if I lost $20, I couldn’t go to my boss and expect him to pay me again. It’s hard, but I want him to learn the value of money.” The lesson has obviously stuck with him. When Ryan is asked what he’s learned by using coupons, his immediate response is: “I’ve learned not to lose them because my mom won’t refund them.”
The Alphonsos’ successful efforts to teach their children about money management are a creative example of DOFE Principle No. 7: to provide access to programs that will educate my children about business and finance.
Stacey also uses her home-based advertising and marketing business, Mecca Marketing Media L.L.C., to teach Ryan and Brianne about business and entrepreneurship. The children help their mother with mass mailings, filing, and other small tasks, and they’re paid for their work. They also critique her presentations and advertisements, and she discusses business strategy with them. “I’ve taught them about [business] finances,” says Stacey. “They understand that if I complete a project for $100, it doesn’t mean I make $100 because I have expenses that I have to consider.”
The children have also learned a little about investing. Ryan is in a gifted program at school that picked companies to invest in and followed their progress for a trimester. The Alphonsos also discuss investing at home. “We watch TV and track the stock market
by looking at companies we’re all interested in,” Stacey says. One of their favorite companies is Disney. When Comcast was recently trying to purchase Disney, Stacey explained why it would be a good time to buy Disney stock. “I told them that when there’s conflict and unrest, prices of shares drop, which is when you’re supposed to buy.” By using the coupons, the stock market, and her business, Stacey has her children well prepared for the financial realities of life.To provide access to programs that will educate my children about business and finance
Stacey is diligent about educating her children about money because she says: “As African Americans, oftentimes we’re learning these things through trial and error as adults, while in other cultures, people are generally better prepared.” She is teaching her children a number of life lessons early by following these steps:
Keep it real: Ryan and Brianne are learning to be responsible by dealing with real life issues. Just as in real life, if their jobs aren’t completed, they don’t get paid. Managing their money has also given them a newfound respect for cash. “When they have to spend their own money to buy video games, they recognize that it doesn’t grow on trees!” Stacey says.
Teach your children about business: Ryan has learned about being an entrepreneur by watching his mother. He is currently saving for a school trip to California and decided to sell jump ropes at school to help raise money. He realized that he would sell more if he had a sales force, so he enlisted his friends to help. His mother discussed profit margins with him and other elements she is faced with as a business owner. Ryan created his own business plan, designed an order form, distributed recruiting advertisements, and designed flyers to distribute. He even planned to give each recruit a jump rope to show prospective buyers. When he could not enlist enough friends, he decided to raise funds by writing to local businesses instead.
Let children learn by doing: It’s easier to learn by doing and lessons become ingrained when children are given the freedom to manage their money. They will obviously need guidance and might make mistakes, but ultimately, the errors will teach them about financial responsibility.