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Teaching Your Kids Money Skills Early on With “The Family Funds System”

When I was in seventh grade, my social studies teacher, Mr. Shulman, announced to the class that in a few weeks we would be given $100 of phony money to play the stocks. And, whoever ended up with the highest valued portfolio at the end of the semester would be stock market royalty.

I couldn’t wait. I knew exactly where I was going to plunk my c-note. Diversity, my foot. I knew that Atari was the stock of the future. I started reading the financial section of the paper and watched my pick climb. But, Shulman’ never introduced the game. So, I was unable to learn to play the stock market, which may have been a good thing since Atari tanked soon after I had chosen it as my Golden Child.

As a thirteen-year old boy, I was very interested in learning how to invest. I wanted to know about compound interest, and saving and even donating. I yearned to earn. Kids are not too young to be exposed to the world of finance. Yet, it wasn’t until a good ten years later, that I started to get my feet wet and teach myself about the world of money.

Now, I am no financial wizard, but I know a lot more than that peach-fuzz wearing, Rubik’s-Cube-playing, pimple-faced, Atrai-buying middle schooler of the early eighties. And, I wanted to make sure my daughters had the chance that Shulman had taunted me with, but kept out of my reach.

Today, my daughters, eleven and sixteen, have their own savings accounts, their own mutual funds, and their own stock portfolios. This is not some kind of trust fund left to them by a rich uncle. We are a middle-class family and my girls have worked hard for their money, and because of what they learned early on in life, they have chosen to save, invest and even donate.

What can parents do at home with young children to prepare them for smart money-moves when they get older?

So that our daughters would understand the value of money and the importance of delayed gratification, when they were much younger my wife and I created family funds in our home, “Baxter Bucks”, currency that was only redeemable within the family. Each girl had her own bills (ones and fives), with her picture on them instead of a past president.

When the girls completed their chores they would earn some Baxter Bucks. If they felt they needed more funds, there was a list posted on the fridge of jobs they could complete along with the payment next to each one. To the right of this sheet was another list of ways the girls could use their funds.

Although some of the things on this second list were material items, the majority were experiences and activities. The girls could buy a bowling date for the family, a day-trip to the beach, an extra bedtime story at night, free choice of what the family watches on TV one evening, a bike ride, movie night, etc… And, if there was something that one of the girls wanted that was not on the list, we’d just add it and attach a Baxter Bucks dollar amount to it.

One of the benefits of our family funds system that I now realize was that the girls learned about immediate versus delayed gratification, which is huge when we want our children to learn about saving and investing. They learned they could make brownies today, or head off to an amusement park at the end of the month if they saved. They discovered that if they did the bare minimum, they’d have less choices in life. They learned math skills and a strong work ethic. These experiences set the foundation for our daughters to understand the value of money, how to earn it, save it, grow it, donate it and invest it even at their young ages.

So, maybe Shulman never taught me why Atarti was not best investment choice, but he planted a seed that has grown with my daughters, because of our Family Funds System.

Leon Scott Baxter's picture
America’s Relationship Guru

Leon Scott Baxter, “America’s Relationship Guru,” is the author of Secrets of Safety-Net Parenting and the founder of He’s the father of two girls, 12 and 16, and has taught elementary school for eighteen years.