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Thread: Kids and allowance/managing money

  1. #1
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    Default Kids and allowance/managing money

    How do you teach your child/ren to manage money? If you give an allowance or let them earn money for chores, do you make them set aside some of it for saving or giving?
    I have read a few sources that said you should allow your child to do whatever they want with their money, and then they can learn from experience. If they want something more expensive, and don't have the money for it, then they don't get it and then they learn the value of spending.
    However, if you have a more impulsive child that would rather just spend the money the moment its put in their hands, will they ever learn to save that way? At what point with this issue should parents step in, and when should they just back off?

  2. #2
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    We were torn on this one. On the one hand, I don't like the idea of paying my kids to do the thing that are expected of those living in a household. On the other hand, I don't like the idea of just giving them a set amount of money each week with no effort on their part (which is what I think of when I hear the word "allowance"). BUT they need to have the ability to have an income of money if we ever hope to have them learn how to manage money, right???

    So what I came up with was a check sheet for each day. It's all things they're expected to do anyhow-"morning things", schoolwork, daily responsibility, clean up before bed. But they're not earning for doing them. They're earning for doing them ON THEIR OWN and WITH A GOOD ATTITUDE. None of those 4 things are really negotiable. But if I have to remind them to brush their teeth (beyond "did you do your morning things?" one time as they move on to other things) or have to fight with them to do their homework or pick up their things from throughout the house-they don't get an initial. Each initial is worth a certain amount of money which will amount to the number of dollars they are old each week. So Keira has the potential to earn $9 and Scharae can earn $8. If they miss any initials they can earn up to 2 back via special tasks...but honestly in 6 months we've only had to earn back like 4 and that's with some doozies of meltdown days on Scharae's part. She seems to be able to reign things in to get the "need tos" done with a decent attitude.

    So that's our initial system. Pay Day is Saturday morning and John gets out the "family bank" which is actually a spreadsheet on his laptop. They have check registers where we write their deposits and charges in. They can choose to actually take a cash payout each week or keep it in the family bank and at a store we pay and they write it down and subtract it. This gives them experience with both cash and a sort of debit card situation as well as learning how to use a check register.

    Each week they pay 10% tithing and then we have a savings program (self contained, sort of). We expect no less than 10% be saved each week and we will match up to 20% of their contributions. One of them is more able to see the longterm benefits of this arrangement and more likely to save 20%, one is more likely to go with what gives the most NOW. When we do this John sits them down with him and shows them their savings accounts (we have actual ones that are linked to an account of ours so this isn't just on the spreadsheet). He goes through it with them and shows them how much they had to start with, deposits first THEIR contribution and then our matching in two different transactions so they can visualize it better. This is money they'll get to use for college, trade school, etc.

    As far as how they get to spend their money...I'll be honest, I just say NO sometimes. Usually it's when I'm uber annoyed and taking it out on them. Or when I know they've got too many ponies at home to keep track of and don't care to add yet another-in other words I do sometimes treat THEIR money as if they're asking to spend MY money. And that's not fair to them. I'm working on being better about gently talking them through it, and then taking a step back. John's pushing me on that because that's the whole point of us doing this process! If I want the override ability then we shouldn't go through the daily and weekly tasks this creates. And I know that. We do have certain types of things they're aren't allowed to buy, because we wouldn't buy them for them/don't want them in our home. But that's supposed to be the only parameters...if they have the money I am supposed to let them live and learn with good and poor spending choices.

    They do each have a $ goal written in their check register...but haven't ever met it. When we were in Oregon they each spent almost $50 which upset me because their goal of money to save for their own spending was $75 so they were SO CLOSE. But we were on vacation and they had their own money so I stepped back and let them blow it on mermaid dolls from the coast and salt water taffy and sunglasses.

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  3. #3

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    We don't really have set allowance. I am also not a fan of paying them for everyday chores.
    If they want to save up for something, I'll give them above and beyond jobs to do. Savana watches Sawyer for me sometimes so I can do a yoga video. Kai will do anything! Lol. He's the master of cleaning up the dog poop from under the deck. I pay well for that one.
    It is their money and I absolutely let them spend it on what they want. One thing I will do, however, is ask them if they want to wait and find a better price. Then we go to amazon, read reviews, compare prices, etc. Usually they are open to advice.

  4. #4

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    I'm not certain what the "right" age is, but I think our little ones are still too little for this. I think at this age it's fine to discuss finances with them. Sometimes Elliot will ask to go to lunch at an expensive place and I will talk him through why I'm not making that choice, how much that place costs, and what we could do with the money we won't be spending by making another choice.

    When I was older I helped my Mom write out checks for bills and knew the general workings of the house in terms of finances. I never received an allowance and didn't have my own money, aside from birthday/christmas gifts, etc, until I started working at Burger King at 16.

    I don't really agree with allowance because I feel like it sets this expectation of getting paid to do things around the house and, of course, there are things one MUST do because they are part of the family. I know with DS1 if I started giving him an allowance for things he'd expect it for everything and that's a pandora's box I don't want to open.

    The kids do have coin jars where we've given them our loose change for no specific reason. They've accumulated a lot of coinage from a family that primarily doesn't carry cash. DS1 has occasionally asked to spend his money on different things, but hasn't passionately committed to anything enough to to take his money out and spend it.

    I like a lot of the program outlined above, though, I have to say. The doing things with a good attitude and not having to be told multiple times sounds great for DS1. At what ages did you implement this program for your kids?

    I still feel like my kiddos are still too young for this, but looking forward to hearing what ages you started.
    Dorcas (35) DH (36) 3/13



  5. #5
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    We just started it six months ago, so they were 7 and 8. Prior to this we never really did money stuff. We had a bit more property so they could do extra stuff outside around to earn the ability to buy a new game or whatever. But that's about it. But the attitude thing isn't too new. We have had a chart since they were 2 & 3 that we've gone in and out with actually managing to use over the years. When they were young enough for stickers, that was what they earned. Oh how I miss the days when the idea of getting to pick a sticker for the chart drove them! Again, that wasn't for doing things we expected anyhow, but rather for HOW they were done (attitude, mostly). It has really helped take ME out of the equation for my youngest. She has a list of expectations and it's not MOM saying she needs to do them. It's the chart. Sounds silly and probably wouldn't matter to most kids but it does to her!

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  6. #6

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    We started something and it isn't working so I enjoyed reading the responses. I ll write more later today on what we have done and why it's not working.

  7. #7

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    Quote Originally Posted by DucksLikeRain View Post
    But the attitude thing isn't too new. We have had a chart since they were 2 & 3 that we've gone in and out with actually managing to use over the years. When they were young enough for stickers, that was what they earned. Oh how I miss the days when the idea of getting to pick a sticker for the chart drove them! Again, that wasn't for doing things we expected anyhow, but rather for HOW they were done (attitude, mostly). It has really helped take ME out of the equation for my youngest. She has a list of expectations and it's not MOM saying she needs to do them. It's the chart. Sounds silly and probably wouldn't matter to most kids but it does to her!
    Can you tell me a bit more about this? DS1's attitude definitely could use some adjusting. He gets very pissy when asked to do things.
    Dorcas (35) DH (36) 3/13



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