My oldest kid is just about to turn eight and he is starting to talk about money. Well, he’s counting his coins in his piggy bank, learning addition and subtraction in school, and of course he’s saving and spending the couple of ‘ice cream’ dollars he gets for Birthday and Christmas from the grandparents.
So, naturally for us as parents, it’s time to think about instilling into our kid some sense of realism around money by encouraging him to spend his cash on stuff he really cares about and to save up for toys he might not be able to buy immediately but rather bigger ones later on.
All good things and things we learned as children ourselves in some way or another, hopefully at least. But in many ways the world has changed and the same things that worked for us when we were children, might not work for our kids anymore. I used to walk into town, take my few cents to the local bakery or to the toy store and buy some candy, carefully counting out the exact amount to maximize each ‘Pfenning’ I owned. But nowadays kids don’t have the chance to walk to a store by themselves an spent forever debating over what color gum they should get.
What they can do today, is go and convert their loose coins into iTunes gift cards and buy themselves little 99cent games and or even movies on their iPads.
You win one, you loose one, I suppose.
The debate we’ve had in our house lately, is around setting some healthy parameters on starting an allowance for your children.
For me, some elements are easier than others. Determining when is the right time to start you just feel out. Your kid will start asking how they can ‘earn’ more money, especially if you are not the parent who says ‘yes’ every time they see a new LEGO set at the toy store. That’s your queue.
How much an allowance should be is also reasonably easy answered: Give the kids as much as you want to afford. No reason to mortgage your house for it, but every family has a different threshold, so, you will know what feels right. And if you start when they are young, a small amount goes a long way. They don’t know that coins are just the bothersome remnants left in your pocket after a rare shopping trip where you actually used cash.
But just giving an allowance for allowance sake doesn’t feel right to me. So tying the allowance to specific requirements and some expectations seems healthy, and this is where I wanted to be creative.
The one thing I definitely didn’t want to do is to create a chart and tell my kid that it’s 50 cent for doing the dishes and 25 cents for helping put the laundry away.
In my perspective this just creates the wrong set of relations to the chores and to the money in the kids mind. We as parents are doing those tasks every day for free, so why should a kid get compensated for helping with it. I can already see that the kids might enjoy this sort of scenario for a few weeks and soon recognize that being lazy might be more enticing than the 25 cent earned. Parents don’t have the freedom to choose laziness over doing the chore so the kids shouldn’t either. Food must be put on the table if we feel like it or not.
So, this made me sit back and ask myself what I am really trying to teach my kids at an early age around the aspects of money and I came up with 2 things that were really important to me.
In our house it’s not about a smart calculated set of chores, but an overall responsiveness to the expectations of the parents that’s worth rewarding. If you are incredibly naughty all day, but quickly brush down the list and do the 3 things that get you cash you shouldn’t be rewarded for it. In our family we don’t just check of boxes, we aim to respect each other every day and with everything we do.
Yes, money tends to burn a whole into anyone’s pocket. Getting the first $10 bill from Grandpa can be an exciting moment in a kids life. He can go all out and buy himself ANYTHING he desires from the LEGO aisle, it’s his money after all. Well, anything that’s under $10 of course.
So, how do we teach the kid that he could save up, wait a few month and get ‘the cooler set’ rather than buying himself a Matchbox car every time he walks into a Target? Which, I believe is a fundamental aspect every person has to learn at some point in their lives.
At the beginning of each week he will get a dollar. That is his allowance. And it’s his, with the promise that he will exhibit good behavior, help around the house, work diligently on his homework, won’t talk back and behave as expected by his parents. If he fails we demand the dollar back, or at least threaten him with this, if he does not listen at all. This gives him a reminder all week that he’s working for something, he has to dollar in his hand, but it’s his to loose. And we, as parents can play it by ear. One week we might ask him to help clean the garage, another focus on his homework or just playing nice with his sister. But he will get his dollar.
At the end of the week, if he has not spend his dollar, he will get another dollar as a reward for saving it, almost like interest. I got this idea from a back-of-the-magazine New Yorker/New York Times Sunday Edition story about the Rockefeller’s and how they handled allowances for their kids. (Or I’m pretty sure it was the Rockefellers and I am pretty sure it was the NYT, don’t quote me on that).
This is what we’re going to start next week, and I will see how it goes and will tell you if it works or not and what we learn along the way.
Good luck son, the world is yours.