The “experts” at the USDA in their 2010 report “Expenditures on Children and Families” say that we should expect to spend about $261,000 to raise each child from birth through age seventeen ($14,500 per year)

Steve and Annette Economides kick off their book, The MoneySmart Family System, with this wonderfully depressing statistic.

Great, so at 3 kids, I should expect to spend $43,500 a year?

Thankfully, Steve and Annette don’t view the world the same as the ‘experts’ (Tweet this )

Neither do I and neither should you.

When I first checked out this book from our library, I wasn’t sure what to expect. What I didn’t realize was that this book would not only resonate with my views on money, but also my views on parenting and the values I hope to instill in my kids.

The MoneySmart Family System was a pleasant surprise and it’s resource I plan to go back to for years to come. This is one of the rare books I plan to actually purchase to have available and not need to check out from the library when I want to look something up.

An All-Encompassing System

One of the things I really enjoyed about how Steve and Annette approached teaching their kids money was how it was integrated into all other aspects of their parenting.

Steve and Annette recognize that the true goal of parenting is to raise kids to be successful and self-sufficient; not just from a financial perspective, but in terms of values, skills, and work ethic.

By building a system that incorporated all of these together, their kids were raised with the end game in mind - getting ready to be productive, self-sufficient adults!

Pennies for Points

The core of the MoneySmart Family System is a set of evolving expectations for kids that bridges between positive behaviors and personal finance.

Expectations were set and measured in a system of points that could be earned throughout the week. Points were available each day for:

  • Morning Routine
  • School
  • Chores
  • Round-up (cleaning up and bedtime routine)

For each area that a child accomplished what was expected (including doing so with a positive attitude instead of kicking and screaming), they earned a point.

At the end of the week, points were tallied and translated into “paychecks” on family pay-day. As kids aged, the value of each point increased, as did their expectations and the items they were responsible to pay for on their own.

The family started this at a young age - the book breaks guidance down into different age groups starting at age 0 and going through age 24.

Setting Up Good Money Values

Starting with their first “paycheck”, all kids divide their money into different categories. At the youngest ages, this includes giving (charity), savings (long-term), and spending.

As the kids grow older, clothing, activities, car insurance, and other categories are added to reflect an increase in personal ownership and responsibilities.

At first blush, it may seem a bit strong to ask kids to pay for their own clothing or activities, but Steve and Annette had a different take.

Which is more loving? Buying clothes for your kids without question or raising your kids to shop for themselves, making smart decisions within financial limits?

While giving kids everything they ask for is often portrayed as being a good providing parent, it creates a strong possibility of raising kids that are entitled and don’t learn how to control their own spending.

I was fortunate to have parents that used an envelope budgeting system for my allowance. My allowance was divided into different categories that I was responsible for purchasing for myself (clothing, entertainment, etc). This taught me the importance of budgeting and how to save up for items that I really wanted instead of just spending whatever I had available.

The MoneySmart Family System goes a step further than this though with the point system because kids not only get ownership over their spending, they also can take ownership over their earnings.

By using the point system, each child is in control of their own allowance based on doing things that are good for their well-being and the well-being of the family.

This sets a good precedent for work habits for the future, whether those are applied as an employee or an entrepreneur.

Incremental Expectations

Across a wide range of topics from gift-giving to chores to schoolwork to dating, the MoneySmart Family system gives excellent guidance on how to set appropriate expectations at each age and how all of these topics fit together into one cohesive parenting package.

You might think that there aren’t any chores reasonable for a 4-year-old to do, but Steve and Annette have answers on how to build habits and “helper mindsets” that get the ball rolling.

You might think that kids today can’t possibly make enough to pay for their own college tuition without debt, but Steve and Annette have guidance on savings and scholarships that can help them get there.

You might think that Steve and Annette sound like super-parents and there’s no way you could possibly do everything they did but they’ll be the first to admit that they aren’t perfect.

This system isn’t dependent on perfect parents - it’s dependent on loving parents that truly want the best for their kids.

The MoneySmart Family System goes against much of what we are pressured to do as parents every day (Tweet this )

Aren’t we supposed to give our kids more than we had (toys, clothes, etc)?

Isn’t a child’s only job supposed to be schoolwork?

Shouldn’t we be enrolling our kids in tons of activities so they can become well-rounded and have an edge over other kids?

No, no, and no.

Steve and Annette show that the best parenting doesn’t come from common marketing messages

Great parenting comes from remembering your real job: loving your kids and preparing them for life (Tweet this )

Net Effect

Remember that $14,500 a year number from the beginning? Steve and Annette estimated how much it cost them to raise each of their kids through age 17. By their estimate, it only cost them only about $3,227 a year for each child.

The net effect for Steve and Annette’s approach to parenting was raising kids that learned not only to be financially self-sufficient, but that demonstrated great work ethic and caring for others.

And they did all this for less than what the “experts” think it should take.

This book was written by two parents that raised children with the values that we hope to instill in our three daughters. The value of hard work, charity, faith, and responsibility all resonate strongly with my vision for our family and I wouldn’t be surprised if it resonates with your vision for your own family as well.

If you’ve got kids of any age, I really recommend picking up a copy of The MoneySmart Family System by Steve and Annette Economides.

To get your own copy, here’s a link

The MoneySmart Family System book cover