Your child now has money in three groups: give, spend, and save. What's in the give envelope goes to church, what's in the spend envelope can be used to spend for presents, and what's in the save envelope in our house is used for two purposes: saving and also re-investing. This is where it gets tricky. After each child accumulates a certain amount in their savings, we put it aside. With the rest of the save money, we re-invest it to gain money. For example, at a yard sale Hardy may decide to buy something with mom or dad's approval to try to re-sell with dad on Cragislist or ebay. Each of the kids take their save envelopes garage saling and it is fun to watch them learning about buying good bargains. One time one of the kids made a ten dollar profit on something bought from a yard sale! Then we just take that money and divide it up again. This helps multiply their money faster and helps them get some real money to deal with. (Once the money gets rolling, it's best to open up an account for each child or keep track of their savings in a separate envelope.)
Giving your child, or grandchild, an awareness of money can be a valuable gift you give him. Though Hardy is only in kindergarten, he is fully aware of the value of a dollar. He knows that four quarters equal one dollar, and also knows the time it takes him to earn that one quarter. By the way, Hardy already told me he is going to the dollar store to buy everyone their Christmas presents! I congratulated him on his smart thinking and definitely approved his choice of store. Dollar store, here we come!
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