Friday, September 3, 2010

Let's talk about money

childrens money jars

We have an allowance system in place for our family - my husband even takes out a personal allowance that goes into a different bank account for him. I'm the only one that doesn't really take out the allowance and use it on myself (something I need to work on).

Personal allowances, and the fact that the kids get their allowance on "Allowance Day" is a big help when they are shopping with me. If they see something they want, I can just suggest they save up their allowance. It has cut back on begging and whining in stores like a charm.

But I've been sliding and getting lax on our original intent, which was to require the kids to also save part of their allowance and donate part to a charity of their choice. I've been taking them to the store without giving them cash first, and letting them each pick out something roughly in the ballpark of their allowance amount. If the sales tax pushed it over, or it was a couple bucks more than they had, I just covered it for them and they really never handled the money themselves - it was all on my debit card.

Not the point of an allowance, I think. It's exactly the mindset that doesn't pay too much attention to how much something costs that has led me to carry credit card debt that slowly creeps up month by month.

On the flipside of spending money is earning money. I really hate it when kids aren't willing to do anything around the house unless they are paid for it, and I think chores are mandatory parts of life. But - there are limited ways that kids can earn money, and my kids are very interested in earning more money. I'm trying to think of "extras" that make sense to pay them for. And I'll pay them in cash, but they have to keep the cash out in the open (it has been lost in their bedrooms before, so this is just safer - money is not a toy).

So far, I've paid them for "being their own babysitter" at work one night when I couldn't find a sitter. I'll also pay for them to fold my laundry (not theirs - they really should fold their own), and I'll pay a bounty on all dandelions pulled up out of the yard. Carbon really wants to set up a lemonade stand, but the season for that is already past. We'll keep thinking about entrepreneurial opportunities for him.

And they are back to donating part of their money - they both chose the World Wildlife Fund as their charity.

How do you handle money? What do you think leads to better money habits?


  1. HI Sara,

    We have a base amount that our daughter gets for generally being a good kid and helping out with stuff we all do. Then she get's a rate of pay (1$/hr) for special tasks like helping in the garden, brushing her sister's teeth every night (she loves that one), matching socks, taking care of her puppy. We also have a "buy something new, trade something old" rule -- which doesn't work very well, as most of what she would get rid of we end up keeping for her sister anyway. Something we really want to work on but don't have the slightest idea the whole subject of entitlement (for ourselves as well I think).

  2. She gets $18 a month (it's $1 per week per year of age rounded up to the nearest number divisible by 3) and has to put 1/3 in savings, 1/3 in "sharing" and then she can spend 1/3, so right now she has $6 per month to spend at her discretion. It's not much, but it goes far at Goodwill, and we've begun to work out some ways to make saving for longer periods more worthwhile (like us contributing half the money for something if she saves the other half). For a long time this was kind of silly, since she'd spend all $6 immediately, but she has recently been talking much more about saving for things, and has held back portions of her allowance.

    I also realized that for her, seeing is wanting, so we now have a household policy of not taking the girls into any stores unless it's totally necessary. I shop by myself on weekends now, or take the girls to a shop if there's a specific purpose for taking them. We don't get catalogs, and when she begins to use the Internet she won't have access to sites that are selling merchandise. It sounds harsh, but even with these changes in place she's still exposed to toys and liable to obsess about things she's seen and wants. We're just trying to shift the focus to experiences that don't cost anything but feel time outdoors and with friends and family.

    It's hard, though!