We told Middle Son to imagine that he was 18 and working 35 hours a week in a Minimum Wage job. He would therefore earn £4.98 per hour. (UK minimum wage for 18-21 year olds).
His task was to work out his total earnings per week and produce a budget. We didn't allow for the possibility of debt-the budget had to balance.
So he set to and worked out a menu which he costed using an on line supermarket. He looked at the cost of rented accommodation, clothing, leisure and travel.
Not surprisingly, it was difficult to get the budget to balance.
This project led to useful discussions about
- giving and tithing
- priorities in budgeting
- renting vs buying
- mortgages and how they work
- how to cut expenses
- living alone vs living with parents or sharing
- where to buy food
- how to earn more
- the value of study to increase long term earnings
Please do comment about how you teach your children about finance.