As a non retired 41 year old, I am obviously not a successful Mustachian, but here is what my husband and I are doing. Our children are 10, 15 and 17.
1.Pre primary children went grocery shopping and received a lesson on price comparisons every week ;). We aimed to model how to work and how to have productive hobbies - they" helped" in the garden and the kitchen and ate what they grew/made. We mostly made presents for friends and family, and most of the gifts the children received were hand made items.
2. Primary school aged children recieve a very small allowance (our 10 year old receives $2 per week), from which they do not have to save a %, but all gifts must be purchased, including presents when attending a friend's birthday party. They are not permitted to buy sweets or junk food with the money, but can buy toys or hire DVDs. Chores are not directly rewarded with money. Lost or damaged items due to foolishness may need to be replaced from this allowance. Money received as a gift (birthdays and christmas) is used to purchase items as this is what the giver has intended. We budget by reminding of upcoming birthdays etc.Price comparisons and value comparisons are discussed with every purchase, and there is a lot of parental input, particularly when the child is younger. There are often parental vetos. We discuss things such as the financial and health reasons for riding to school rather than being driven. This seems to come up more often when it rains :) We model as much as possible how we expect hard work and thriftiness as family values.
Primary school children can earn more money by asking for extra jobs at home. These are paid at a fairly miserable child labour rate, depending on how well the task is done. Another alternative is to earn "lazy time". In order to watch television or play computer games, an hour for hour exchange of work is required - eg: to play computer games for an hour, you need to do housework for an hour, or do baking for an hour. Music practice gets half rates - one hour of practice =1/2 hour of lazy time.
It is interesting that the lazy time is often much more appealing than the $.
We probably bought them too many things. They have a massive lego collection, bike, skateboard, trampoline, roller blades - we tended to buy active toys for birthday and Christmas gifts.
3. Once a child turns 12, they have to earn their own money. As we own a business, they perform age appropriate tasks either at the business, or for unusual activities, at home (eg, painting or renovating tasks).( Where we live, children from 12 can work in a family business, but non family members must be 14 and 9 months). They can work as much or as little as they wish, so long as it does not impact on their school work, and are paid the award wage +10%, just like our other employees. They can spend 50% of their income, and the rest is banked, for university, or if they don't go to university, for after they finish high school. There are no restrictions on what they can buy, but they are expected to buy their own clothing from this money, and pay for their own entertainment and camps. We continue to pay for school uniforms and regular shoes. We continue to pay for music lessons and one sport if wanted.
We provide advice on how to manage the spending money and clothing budget, particularly in the earlier years.
We have some initial results from this. Our 17 year old daughter is finishing high school in 7 weeks. She has enough of her own earned money to fully support herself at university including rent in an expensive capital city for 3 years - for which she has researched an annual budget, and expects to earn enough in the summer holidays to cover another year. She hopes to do a degree that takes 5 years. As we will be paying her "rent" by allowing her to live in a flat we own, this means she can support herself and contribute to her university fees, and if she continues to work once she moves away, which she expects to do, possibly pay it all. She is a better Mustachian than her parents, having saved approximately 90% of her earnings.
Our younger daughter had trouble with overspending and inappropriate spending at first. She bought herself sweets and chips, and went to the movies with her friends quite frequently. It was difficult to see her do this, but we kept (mostly) quiet! She then found she had to work more hours to keep doing this, and found that she did not like the effects of junk food on her figure or skin. It took her about 18 months to stop buying rubbish, with only very gentle prompting from her parents (and much more vigorous prompting from her sister). Currently her savings rate is about 80% and she is keen to work and earn money to save. She now arranges movie nights with her friends where they hire DVDs and make their own popcorn, and has learnt to sew her own clothes so that she can wear outifits that look and last better than her ( from wealthy families) friends' clothes. She tells her friends that brand names are a rip off, and as she is a very convincing young lady, is now teaching her friends to sew in the holidays. We are more proud of this than the natural Mustachian tendencies of daughter 1, as she had to work harder against her own more impulsive nature to come to this point.
Having written this boastful post, possibly daughter the first will blow it all in her first week of University, but I hope not!
