A great financial plan for children

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September 20, 2009

Anonymous The Laurel Leader-Call Sun Sep 20, 2009, 11:42 AM CDT

Someone once said that “Finance is the art of passing money from one hand to another until it finally disappears.” You may have to stop and think about that for a moment, but here is the real question: Where did this money go?

When I was growing up I would often hear a comment about someone who had just come into some money. The comment was that the money burned a hole in his pocket. Well, that’s where it went. To be sure, that old saying, “A fool and his money are soon parted,” is true.

What brought these thoughts to mind was something I learned recently about a plan to teach young children the value of money. Before I share it with you, I might add that parents who give their children large amounts of money without them having to earn it are doing them a great disservice. I am always pleased when I learn of or hear about a high school student working to earn money for college or other goals because I know this is preparing them for the real world, one they will face soon enough.

When it comes to children earning money, something my friend Jim “Hangman” Ballagh, over in Mystic, Iowa, told me recently really made sense. He and his rag-tag army of kids, mostly from poor families, have literally cleaned up their small town. He pays them $6 per day, just for the days they work, from the donations he receives from his supporters. This money is deposited to the “Hangman Army” account and the treasurer is 10-year-old April Walker, who has worked her way up to the rank of two-star general. She gets an extra $5 per month for writing checks and keeping the records straight.

Here is the plan and how that $6 per day is used by members of the army. Keep in mind that this is mostly a summer program; however, they do work some in the evenings and on weekends when they are not in school. The first $2 is for the child’s spending money. The next $2 goes into the account in their name, to be used when they need some extra money during the school year. The final $2 goes for charity. One month they write a check to the Legacy Foundation at the hospital and to the Salvation Army in Ottumwa the next month.

Here’s the payoff. Instead of buying prizes with the money members of “Hangman’s Army” had saved up, they voted to have April Walker write a check for $417 to the Hurricane Katrina Victim Relief Fund to help homeless children. This plan is effective because they don’t make a big deal of what they are doing, as they learn from actual experience. When you start with children, some as young as age 5, you teach them values from this concept that they can’t get from other experiences. Jim says his army does not go around town or anywhere else with a hand out saying, “We are poor kids, will you help us?”

He is teaching members of the army to earn what they get and these kids learn values such as money management, hard work, compassion, good citizenship, personal responsibility, pride in self and community and a whole host of others. I also had a letter from a reader in Griffin, Ga., about my column on the $2 bill that is worth passing along. In response to my question, have you ever seen a $2 bill? George responds, “Yes, I have. In fact I have about 80 in a folder right here in my desk.

“A couple of years ago my grandson’s other grandpa showed him one he had and Nick (8 years old) thought it was very neat. I told Nick that I would give him a $2 bill for every ‘A’ on his report card, but he could not spend them. I did this hoping to help him develop a habit of saving money. So far it has worked. He is in the 4th grade now and is running about $14 every grading period. Two years ago we inherited two more grandchildren when our daughter remarried and both of them are very smart. The 12-year-old boy is getting $10 a pop at grade time and the 14-year-old girl gets about $4 to $6 each time. I believe it is money well spent.”

Jim Davidson is a motivational speaker and syndicated columnist. You may contact him at 2 Bentley Drive, Conway, Ark. 72034. To support literacy, buy his book, “Learning, Earning & Giving Back.”

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