Thanks for the comments last week on thoughts on my post about allowance. After many discussions (over months), we have decided to not make allowance chore based. Our main factor in making this decision was we want allowance to be a teaching tool for the boys to learn to handle their own money, not an incentive.
This whole decision process has reminded me of my Myers Briggs mothering assessment where I learned two of my main mothering strengths are preparing kids for life in the real world and teaching them to work hard. Again and again we came back to how we already have clear expectations of the boys that they will help in our household.
On Monday we bought the boys banks, gave them starter money, and explained allowance to them - $2 every Friday. At bedtime last night, Alex was crying and crying. I thought he was crying because Jon was gone. Wrong! He told me he was sad because he wants more money and Friday is so far away. Part of me wanted to cave to give him a quarter, but I thought about what a great teaching moment this was - you don't get money whenever you want!
During this process, I read many books on the subject. The one I would most highly recommend is "Raising Financially Fit Kids" by Joline Godfrey, however the major points of the books don't start until age 5. It explains the developmental changes occurring in children at different age ranges and how those changes relate to money concepts. It lays out fundamental money concepts children can/should learn by age 18 to make them financially fit.
I'll let you know how this goes and would love to hear other experiences as well.
8 comments:
YAY! As as a former loan officer and now Econ teacher thank you for being the MOST important person to pass on financial aptitude in your child's life. 2 future spouses just said thank you!
Our girls have banks they keep their money in and wallets they take out with then if they want to but something. I told Maya that we would be going to the consignment shop today and she ran to get her wallet. She said, "look at this, it's totally cool, I have all this money in here so I can buy stuff what I want!". "all this money" is five dollars that she has been saving for three weeks. She is still a little sad to hand over her money in return for her toy, as she would like both (wouldn't we all) but she definitely is understanding the system more now that she has her own cash. I can't wait to see what your boys come up with!
You are so on target. Have you visited this site
http://www.msgen.com/assembled/home.html
We use the money savvy generation piggy bank and talk to the girls about why they are putting money in the different slots each week. It's interesting to listen to them decide whether or not to spend their money.
We are getting ready to tweak our allowance system, mostly for Jake because he never wants to save his money - he wants to spend it as soon as he gets it so I am ordering the money savvy bank that the OP mentioned for both kids. They are going to get $4 each a week, $1 for each slot - spend, save, invest, donate. I know that seems like a lot of money but since they will only be allowed to choose what to do with the $2 to save and spend, I thought that would be a fair amount. The $1 that goes to invest will be hitting their college funds and the $1 to donate will be for a charity of their choosing.
And I read "Financially Fit Kids" and even for Jake, most of it was for older kids although it did give me some hints on how to get off on the right foot.
Kind of scary that these concepts and discussions are happening so early! But I'm sure they will benefit.
Milo sees my wallet now and says "money". This morning I gave him a dime and he started crying and saying "mo money mo money."
I'm very impressed that you held out last night and didn't cave. You do a great job of making decisions in regards to the long term, even if they mean more difficulty in the short term. Your boys are very lucky. (And will probably realize that when they are about 28)
Another good book to consider is "The First National Bank of Dad" by David Owen. Aside from the opening story on the first page which I didn't particularly care for, I found the book to be full of great practical concepts and tips. It's a quick read too.
At FamZoo, we built a virtual family bank to help parents teach kids about good money habits (as well as charitable giving). Physical piggy banks tend to run out of steam after a certain age, so you might want to consider this online option: http://bit.ly/aijBY7
I'm really interested to hear how this goes for you. We're a couple years away from giving allowances, but I definitely want to start when my kids are ready.
One thing that was kind of fun for me when I was a kid- I got an allowance (chore based), but them I also got pocket change once a week. Of course, this was back in the day when many purchases were made with cash. But basically, once a week, my dad would empty his pockets (or my mother her coin purse) and I got the change to add to my piggy bank. I think I had to count the money in order to get it, though.
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