Reddit reviews Money Savvy Pig - Blue

TL;DR: Gave our kids license over their money within certain boundaries while they are young so they could fuck up their finances with cheap stuff and learn their lessons early on.

Not sure if this is what you are getting at or not, but here's what we are doing with our kids. They have a typical kid allowance/chore system. Doing daily chores nets them $.25/chore. Simple stuff like dishes, trash, clean your room, etc. We have "bonus" chores which pay significantly more for irregular tasks. Clean the toilet in the kids bathroom? $1.00 payout. Mow the lawn - $2.00 (it's a smallish lawn and a riding tractor which they love to drive, it's not even a chore really). These aren't astronomical pay-outs because these are very regular sorts of chores. It's not the amount they earn, it's more about the frequency and revenue potential of doing chores regularly and building a maintainable revenue stream. What is their incentive?

Like many FI'ers we're not lavish with our gifts on birthdays or Christmas. We try to get them ONE very nice gift and a sundry of other stuff they need like socks/underwear/shoes/clothes/book bag/etc. The incentive of the chores is that with some small stipulations, they get to do whatever the hell they want with the spending money. Mom and Dad won't buy you x but with your own money you can go get x if you want. You want a new game for your Nintendo DS? You are stuck hoping on it for your b-day or Christmas. Want it sooner? How much spending $ do you have? Might need to do some more chores to save up if they don't have enough.

Now this sounds like I'm reinforcing the consumerist, hedonistic adaptation we are all surrounded by. Here's the difference: Pay-out of their allowance has rules around it. We "pay" them a lump sum each month, but they have to divide it up and record it into a ledger as follows: 10% is "give" money, the remainder is divided into 1/3rds thusly: 1/3 save, 1/3 spend, 1/3 invest. That means if they are $2.00 away from being able to afford x they can't just mow the lawn to get across the goal line. They need to do a variety of chores to account for the splits above to give them $2.00 afterwards.

We gave them typical kid savings banks (note: I do not sell or earn any endorsements for this product, your mileage may vary, etc) to put their money in and every couple of months we go to the bank and deposit their earnings into their own savings account. They do the math and divide up the funds on their own. They fill out the deposit slips and count their own money out at the bank. They have a savings register which shows them the interest they have earned since the last deposit which I make an effort to point out to them each time we go.

spend money literally has no rules. They can spend it all on chewing gum if they want. Mom and Dad have no fucks to give for what they spend it on. Initially, that's exactly what they did with it. Now that they've been using the system for a few months they "get" the idea that if they want x and they don't have the $ today, that means they have to do more chores and save up by not spending their spend money on chewing gum.

Invest Money goes straight into their savings account. The only technical difference is in addition to going into a separate ledger, they can withdraw and invest it however they want. The older one lent some money to his younger brother to run a lemonade stand once which payed out nicely for him. Otherwise it collects interest until he gets an idea about how to use it next. I'll freely admit we need to be more active in this area with the kids. Sadly there aren't a ton of investments available out there for small amounts and young kids.

Save Money This is exactly as it sounds. Sits in their savings account and collects minimal interest.

Give Money Usually goes to church and gets dropped in the plate when it comes around although they've occasionally had fund raisers at school which they've chosen to participate in from time to time instead. We don't govern this much either. Whatever makes their hearts glad for being able to help people in need is the primary directive for these funds.

It's been instrumental in helping our kids understand, at an early age, some very basic concepts about how to manage their money and make wise decisions with their time. Eventually they will want bigger ticket items like a car, etc. where they will have savings they've socked away since they were very young to pour into those desires and I hope they will realize how all that effort over years brought them to a place where they could afford the opportunity to purchase, protect, and maintain that asset. Will they be FI at 22 years old? Probably not. But they might think twice about how they spend their paycheck on the weekends and that's about as much as we hope for. I expect they will make a bunch of mistakes along the way but I'd rather they do it with chewing gum than with a gas guzzling truck to drive to school because "all the other boys have one".

edits: formatting/grammar fail(s), added a TL;DR

He might be a little old for this now (not sure about 9, actually) but I love the idea of this 4-slot piggy bank which has a somewhat similar purpose/method to the ING savings account.

If they get an allowance, try using piggy banks that divide up spending vs. saving vs. donating to charity (such as this one or this one) and discuss with them how they want to split their money.

Lemonade stands are a great way to learn about money -- how much you need to invest up front for supplies (although for younger kids this can just be a "donation" from Mom and Dad), how to price your product so people will buy it, keeping track of your earnings, etc. You can also encourage them to donate half or all of the proceeds to a charity, to support a cause they care about -- I remember having lemonade stands for a local animal shelter as a kid and feeling so proud when I got to go deliver our donation.

Depending on their ages, you might also check out some simple financial literacy books and stories that involve saving money. For younger kids, Needs and Wants or Lily Learns about Wants and Needs look good; for elementary-age kids try Do I Need It or Do I Want It?: Making Budget Choices; and for upper elementary to middle school kids there's The Everything Kids' Money Book. In terms of stories that involve money, check out Alexander, Who Used to Be Rich Last Sunday and The Berenstain Bears' Trouble with Money.