How and when do you let your kids spend money?...

[dblanketyblank]

I've been in a strict family so if I ever wanted something, I was always going to have to ask my parents. I'm not sure if that's such a good thing for teaching my children about money (both too young now, but it'll probably be an issue soon). Anyways just wondering how everyone teaches their children about money. Do you give them an allowance? Are they completely free to buy anything? What about stuff online?
I want to teach them the value of a dollar, but I don't want money to control them.

 

[Father_0f_7]

My kids do get an allowance (up to age 15) but they only get it if they do chores around the house without complaint. They also get more if they choose to put half in the bank. Depending on age they get $10 if they just spend it, if they choose to put half in the bank they get $20.

We will pretty much let our children spend their money how they please as long as it's something age appropriate.
We let them buy the video games they want but they know they are only allowed to play it or watch tv for an hour a day on school days. (Luckily they don't really like TV/Video games anyway).

I think we teach our children about money by making them work for it. After age 15 they can either get a job (and keep their grades up) or do random jobs around the house that they normally wouldn't do.

 

[sbattisti]

My kids get an allowance, but not for specific chores. There are chores around the house, but those are not associated with money, but privileges.

For me, the allowance is more about teaching the kids about the value of money/saving, etc. I started my kids at age 6 with $1 per week. Each year on their birthday it goes up a dollar, so now my 9-year old gets $4/wk and my 15-year old gets $9/wk.

I like Fo7's ideas about rewarding saving. I've done that too in the past, but ended up phasing it out.

Again like Fo7, they can spend it on anything age-appropriate.

~s

 

[dblanketyblank]

I kind of like this bank idea. How do you implement it. Do you create a separate account for them, or do you keep track of how much they should have in there?
Do you let them access money they've saved at a later time?

 

[sbattisti]

Do you let them access money they've saved at a later time?

This is the part that defeated me. I told them that they had to save it for at least six months. But it just became a pain in the butt to track, which is why we phased it out.

 

[Father_0f_7]

We've kind of struggled with that in the past also. Like sbattisti we make them keep it in the bank for a specific amount of time (its at 5 months right now) and we have a calander type thing where Amber and I keep track of how much they should have. Also, the twins (9 years old) don't have the number to their bank account, so they have to tell us when they are going to get anything out.

But all of the kids have a checking account and savings account. What they do is if they get $20 for allowance, half in the bank ($10), out of the $10 that goes in the bank $5 goes into checking (can be spent in 5 months) and $5 goes into savings (can spend when they are 18).

 

[stjohnjulie]

Fo7, you need a bookkeeper!!! That's a lot to keep track of! Maybe you can teach one of the kids how to keep the books for you

My situation is a little unique... we have a business, a jewelry store, and my son spends a lot of time with us there. His dad owns it, and I've been doing all of the 'non sales' stuff for 11 years. On his breaks from school he sets up a stand outside of the store and sells stuff. We have some old costume jewelry from another store that we sold and we gave it to him to sell. He also makes beaded bracelets to sell. He has to donate 10% to a charity of his choosing, and he can have about $20 a day from what he makes to do as he wishes, and the rest goes in the bank. Sometimes he really cleans up! He doesn't even want to touch the stuff in the bank. He wants to save for a car when he gets his license. He's only 9, so he should have a pile when he is of age. He's been at it for a couple of years now, on his spring break and Christmas breaks and has about $1,000 saved. With the 'spending money' he has to ask permission before he buys anything. He's had two big purchases thus far, and iPod Touch and most recently a soft side surf board.

I think that it's good to teach the kids about saving for a goal. Delaying the gratification seems to be a good way to prevent them from having debt problems down the road.

 

[JessicaMadison]

Great question. I like everyones ideas. I started my kids on allowance when they were 5 years old. It was 2 bucks a week. BUT, there was a catch. I had a chart. One for Bailey, one for Hunter and one for Alexis. It had some easy little things to do each day depending on the age group. It got more extensive each year. Examples for young age groups: (Brush your teeth, wash your hands after you go to the bathroom, pick your toys up, do any homework you may have, look at a book etc.) When they completed one of these things each day, they would come get me or Jace and we would check it off for them. If they did everything on the list at least 5 times in a week they would get their two dollars. It went up by $2 each year. So by the time they were 10 they were making $10 a week if they did everything right. We used piggybanks lots. When they were 10 we gave them $5 cash and put $5 in the piggybank. When they made 2 bucks a week they put 1 in the piggybank too. You got me? But then they had to do bigger things like help with laundry, wash dishes...blah blah blah. They weren't allowed to take money out of the piggybank. So anyways they ended making a lot of money in their piggybanks. Then the piggybank turned into a savings account. Hunter actually payed for a big chunk of his college this year from his piggybank money.

 

[IADad]

We give our older son $5 a week if he does his list of expected chores without having to be reminded. Actually, we've been a little relaxed on it lately because things have been really busyy, but we still talk about how each of us has to chip in and get things done soe we can all do the things we want to do. Anyway, he gives $1 of his allowance to church and the rest he banks. He has to ask us before he can spend it. So far we haven't had many battles, usually he wants to do something silly like take everyone out to eat, or buy some essential item that we gladly purchase for him. It seems like he really just wants to be grown up like us.

 

[pettypro43]

Teach them young. And share between tithe, charity, saving, and spending money.

 

[MrTimIsFat]

I agree that it is really important to start early when it comes to teaching them about money.

I think allowances are a great tool as long as the allowance is for some kind of service. No one ever learned anything from free money except how to put out your hand.

Also, it's important to teach saving in a way that makes it seem like it's perfectly normal to do so. Putting some of the allowance aside in a savings account because "That's just what you do with money" is a terrific way to ingrain saving money as a reflex.

I think the most important thing to do, and the thing most parents neglect to teach, is how to make their pennies grow. A savings account has a very low yield, but an RESP has a higher yield. When they get older, start teaching about properties, mutual funds, stocks and bonds and RSP's and other things that can help grow his money. It seems far fetched, but putting just a small percentage of his money to good use all the time will help your child be fiscally secure when he is an adult.

My family taught us these things from a very early age and it has helped quite a bit.

Also, help them find little jobs that can help build their accounts. Delivering flyers, refereeing younger children in sports (I started at 10 yrs old), babysitting. By the time they are of an age to start a real job, they will be used to it and they will excel.

As long as some percentage, and my suggestion is 50% since they don't really have anything to buy, is put into the bank and made to grow, they should have a bunch of money saved up for when they move out.

I paid cash for my college education and got to use the fund my parents had built for me to put a down payment on my house and buy some furniture.

 

[sbattisti]

MrTim, I enjoyed your posts and especially your thoughts on savings, but I disagree with this:

I think allowances are a great tool as long as the allowance is for some kind of service. No one ever learned anything from free money except how to put out your hand.

In fact, many parenting groups or experts believe that allowances should explicitly NOT be tied to services. Those people believe that allowances are about <I>managing money</I>. When you tie allowance to services, it often turns into a fight, and a punishment/reward cycle. I found this interesting quote on one web site:

<I>"Do you believe your kids have a certain amount of responsibility around the house just because they are members of the family? If so, those responsibilities have nothing to do with allowances. In fact, if those responsibilities are not fulfilled, the loss of privileges would probably be more appropriate than the loss of allowances.

How can a child manage their money if they don't know how much they will be getting on a regular basis? On the other hand, if a child does not need their allowance that week, is it acceptable not to do the chores? And finally, do we want your children to ask "How much?" every time you ask them to do something around the house?"</I>

I'm not criticizing your opinion on this, mind you. But I tend to lean more towards this interpretation.

Thoughts?

 

[sbattisti]

Also, I'd really be interested in other ideas to reward saving.

Fo7's idea is a little too . . . rigorous for me, but right now my kids just spend spend spend.

 

[Antoinette]

i opened Felix and Alegra up a bank account when they were born. i put $50 in each straight away and they each got $100 from grandparents (so with me and grandparents they ended up with $250) then every week i get $10 taken out of my pay and put into there accounts.

we don't have a key card for these accounts and they won't get one until they turn 17 (hopefully enough in there to buy a car) then when they turn 5 they will get $5 per week cash for pocket money and i will add a dollar per year they can do with this what ever they like, spend it save it. i don't care because i know that they will have savings when they need it.

but i will make it known that for $5 they could buy lollies or a cheap toy but if they wait another week that will be $10 and they could buy something better etc.

 

[IADad]

<I>How can a child manage their money if they don't know how much they will be getting on a regular basis? On the other hand, if a child does not need their allowance that week, is it acceptable not to do the chores? And finally, do we want your children to ask "How much?" every time you ask them to do something around the house?"</I>

But my thought/question in return, is how does a child learn that money is the product of effort not entitlement unless it is tied ro responsibilities.

We roll it all up into discussions/lessons about the fact that everyone in the family does things/contributes to the operation of the family, we all give up some free time when we'd do other things to get the things that need to be done done. This in turn allows us all to have free time to do the things we want to do. Truth is we've never withheld allowance as long as there is effort, and we talk about why things didn't get done, and how to do better next week etc. (just like how you get sick time, vacation, personal time at work) We have used it once as a punishment, which I waiver on the appropriateness, I consider it a fine. We took away allowance once, for lying. And it was after a succession of lies with an opportunity to come clean, so it was a penalty not issues lightly.

 

[chikygrl13]

we don't really let my stepdaughter spend money. It's not that we don't want her to spend, it's that we don't have it to give to her. Before I met my SO he was a single dad with NO help from his ex-wife (he has 100% custody and the ex is supposed to pay child support but doesn't).
I lost my job a year ago (I'm a teacher) and like a lot of other people in California, just paying the bills is a struggle enough. There is very little extra to give to a 13 year old who doesn't understand that you have to WORK in order to make money...

 

[Antoinette]

SO he was a single dad.[/quote]

not to take away from the rest of your post.. is SO an abbreviation? if so what does it stand for i just can't work it out

 

[IADad]

SO an abbreviation? if so what does it stand for i just can't work it out[/quote]

"significant other"...partner, main squeeze......

 

[Amberr]

I don't have a child yet but I do have a good insight on this, I do think its a good idea to teach children a value of a dollar at a early age..

When I was a kid up until I was 11 my mother would keep a chart of chores to be done and how much money we would make by that chore. I think like for example putting up the dishes I would get like 50 cents. It wasn't a lot of money. But I learned everything I did would eventually add up. And my mom would take me to walmart (or the dollar store) to buy some stuff. My mom wouldn't just give us money just for the sake of it.. If we wanted something we would have to earn it.

After 11 I got my first "job" and was able to spend my money the way I wanted too. I really wanted a new bike once but I couldn't get it until I had enough money so I worked for it.. I baby-sited for my aunt. However by then I kind of had the idea about the value of a dollar. I ended up saving up money a lot and still continue to do so these days.

 

[islakermom]

Here is how it works at our house, kids don't earn money for doing every day chores. Making their bed, picking up after themselves, taking out the garbage, etc. These are things that everyone has to do for themselves at some point or another and dollars don't fall out of the sky when a person takes their own garbage out. So we give our kids a weekly allowance to teach them how to handle money. If they are asked to do an extra job around the house, then we will pay them, eg. help paint or help with a large project that we would pay someone else to do anyway. Once they have their own money, they are free to do with it as they please, soon they will realize that when it is gone, its gone, and with a little coaching from mom and dad, they will learn to budget for their spending. Hope this helps