Let Them Mismanage Their Money
You heard me. Let 'em blow it all on dumb stuff. If they want to buy trinkety, break-in-a-week, gimmicky toys, so be it. It doesn't take long for children to begin to appreciate the value of money and the benefits of saving it up for something better than plastic heart-shaped Slinkies.
Well, that makes for a short blog post.
I guess I'll let you in on how we train our children in the ways of finances.
We provide each of our children with an allowance. Allowances begin at age two, because anyone younger just eats the money. Literally. For every year of age, we provide 50 cents. Therefore, our nine year-old receives $4.50/week, our six year-old receives $3.00/week and our three year-old receives $1.50/week. Once we hit the teen years, I have a feeling we'll be adjusting this rubric.*
Okey dokey. This is the tricky part. Our kids do not receive an allowance based on completed chores. However, their allowance is connected to their chores. It looks something like this: Part of being a family means contributing to the running of the household. Part of being your parents means contributing to your savings. You will not get paid to do chores, but if you choose to not contribute to the care of our home, Mama and Daddy will choose to not contribute to the weight of your piggy banks.
So there's that. Take it or leave it.
Every Monday, we do "Savings". The girls all have money tins: one each for serving, saving and spending. Ten percent a piece goes to the first two tins and the remainder goes to the latter. Serving is their tithe, saving is their bank account (which requires periodical trips to the credit union to make deposits**), and spending is free reign. They can do what they wish with their spending money. When they're younger, it is oftentimes squandered on cheap, chintzy junk.*** By the time they are school-aged, they have financial goals. Naomi is undeterred in saving up for a Kindle. It will take her several more months, but she recognizes the value in forgoing spending now, in order to reap a greater reward later.
Q: Isn't it hard to set aside that money every week?
A: It's worth the training and it's cheaper than bailing them out of debt later.
Q: Shouldn't we teach them not to waste money?
A: Experience is the best teacher. When they they set their sights on the prize (be it a Suzy Q peeing doll, a Kindle, or a trip to Disneyland), they will learn not to squirrel away their money in the checkout lane.
Q: Isn't it painful to watch them waste your money?
A: It is no longer my money AND that pain is replaced by elation when they "get it" and begin setting long-term financial goals.
Q: You're so intelligent. Will you go out with me?
A: I'm happily married.
Just making sure you're still reading.
I realize this post is more technical than usual, but thanks for hanging in there with me. I hope it helps!
Reporting From My Counting House,
* Someone clue me in: Do teens still ask their parents for money?
**Of which we often resemble a traveling circus.
***Or sweet-talked into the pocket of an older sister...they learn.