I could have sworn, I had talked about this before, but for the life of me, cannot find it in my archives. Oh, well… to summarize quickly… One thing we did very early with LatteGirl is start her on an allowance.
Now, to cover a couple of issues, I always see when the issue of allowance comes up. We GIVE her an allowance. We do not tie it to chores. Why? Because simply put, we do not provide her an “option” of whether or not she does the chores we ask of her. There is no, conversation like, “well if you don’t clean up your room, your not going to get your allowance.” which eventually (at least once) leads to the reply of “fine, keep you money” No. This is not acceptable, and hence we don’t connect them in such a way.
Now for those that argue, “Why should I pay them for breathing?” I can give you some other ways to look at it. First of course you can look at it as paying on installment the eventual therapy bills they will have as adults, and just consider this sort of a payment plan or savings account towards that. More seriously though, stop looking as it as paying them. Think of it in how much it can possibly save you. You are going to spend money on your kids anyway. This allows an easy to understand cap on some types of spending, as well as provides a way to teach financial responsibility.
We give LatteGirl $1 per week for every year. On other words she is 7 now, so she gets $7 per week, but after the end of the month when she turns 8 she will get a “cost of living” increase. With that money we have set up 3 banks for her and (approximately) a third goes in each. So right now, $2.50 goes towards her college fund (and gets put into her 529 plan every other month), $2.50 goes into her “saving up” fund. These are for larger toy purchases she wishes to make outside of what she gets for her birthday or Xmas. The final $2.50 is for her “instant gratification” fund that she can spend (almost) any way she wants. She wants to buy gum, a candy bar or to get something from the Ice Cream Man rather than the ice cream in the freezer? It all comes out of her money. She learns to balance the “I want” against, “is it worth it?” Yes, she has made a mistake or two along the way (but who hasn’t… I still make them), but by and large, these lessons have really seemed to sunk in.
Which brings me back to why I started this post. Perhaps, she is learning a bit too quickly (for me anyway). I have gone out of my way to avoid certain toys. Some are hard and fast rules that we do not allow (i.e. Bratz) but others are things that I am just sort of trying to stall on. One of those items is a Nintendo DS Lite. She has enjoyed the LeapFrog Leapster, and I get the bonus of not only is it entertaining her, but she is also learning something while she is playing it.
However, lately I noticed she has been a bit more frugal than usual (her only real expense this year was that she finally decided to get her ears pierced… but that is another post), and saving some of her “now” money with her long term. Upon inquiry I was informed that since Santa didn’t come across with the DS, and she already knows she is not getting one for her birthday (her request was for another addition to her American Girl Doll collection), that she was now saving to get one herself. Between her allowance and a few dollars she got slipped to her from my mother (Aany money she gets in the manner gets split between her 529 Plan and her “long term” saving fund. Yes, we have this covered as well), but between her sources, she is already better than half way to her goal. And of course, she was quick to point out, that since it is her money, she is entitled to do with it as she pleases since it does not break the “Bratz Rule.”
I am going to have to add an ammendment to these rules and find a way to give myself more veto power. She is learning her way around these issues far quicker and easier than I ever imagined. I never thought I would regret teaching her money management, but while I am thrilled that she has taken to learning this so well, I can see this coming back to bite me.
I think I am