Money management with kids, and the power of matching

This post was sponsored by Scholarshare.

For a recent birthday, one of my sons got a twenty-dollar bill from a family member. His eyes lit up when he opened the gift. He was excited about his newfound wealth. He pocketed it. 
A few days later, one of our neighbors came over after our kids had been playing across the street at their house. She had $20 in her hand.

Guess who had just left his new twenty clutched in the sticky hand of the neighbors' four-year-old? 

My kids are terrible managers of money. He wasn't being generous with his money, in a that-toddler-could-really-use-some-cash kind of way. He was doesn't realize the value and wanted to share with a friend . . . a friend way too young to be trusted with money.

Savers? Not my kids. No yet, anyways. Had he kept up with that money and had a chance to spend it, he probably would have come home with $20 worth of candy and gum. And don't get me started on what happened when I sent my kids to school with money for the book fair. (Spoiler alert: no books were purchased but we are now in possession with more bobble-head pens and plastic pointer than I know what to do with.)

Mark and I have a lot of work to do when it comes to educating our kids on money management.

We feel like they're not quite old enough to earn an allowance, so they don't really have much money to manage. But we talk about being smart with money a lot.

For instance, we live in Southern California. It's a driving culture. Cars are a big deal here, and we're certain the day will come when our kids begin the countdown toward getting their drivers license. We've been letting them know that they should not expect to walk out the door on the morning of their 16th birthday and see a shiny new convertible out in the street, wrapped up in one of those SUV-sized red bows.

That was never my experience and it won't be theirs.

However, we HAVE been talking about helping them purchase a used car. We talk about it in terms of matching: Whatever each kid can save toward the cost of a car, we will match exactly that amount. My parents made this deal with me and it was a great incentive. It puts half the financial responsibility and all of the initiative in their hands.

We've also been thinking about matching with our kids college savings plans through Scholarshare, California's 529 plan. We already do automatic monthly contributions for each of our four kids. But what if we tied ourselves to some sort of self-imposed matching program?

• When our kids are old enough to earn an allowance, what if we also put a matching amount into their plans?

• When we give our kids birthday presents, what if we matched that amount dollar-for-dollar with a college savings plan contribution?

• What if we asked family or friends to contribute directly to our kids' accounts with an eGift, and then matched it ourselves?

• Or what if we allowed our kids to save their own money in their college savings plans, with a match from us?

I love setting up automatic contributions for our kids' plans because I don't have to think about it. But there's also some value to keeping it front-and-center as our kids grow, and finding ways to save even more. I'm hoping that as we implement some matching with their college savings, it will impress upon them the value and importance of that money being set aside for their education. 

Do you do any kind of money matching with your kids?






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