Erika and I were discussing how great it is that our kids know more about managing money than we did at that age. In fact dare say that our boys are 10+ years ahead in money management compared to what I had experienced.
We don’t use the fixed allowance method, rather we have a weekly chore list, that when all work is completed, it comes with a nice $5 pay day. $1 saved, $1 to the missionary fund, and 50 cents to the bishop’s truck payment. We are on year 3-4 of this routine and have found that it works great for a number of reasons.
First, this allowance test was all started to get rid of those crappy crying sessions at the store. The old, “Can you please buy this? It’s only $8”, are all a thing of the past. The boys know that we will take care of basic need (food, shelter, cloths, education, etc… ) but for other stuff, they are mostly on their own. Candybars, treats and toys are all from their own money, and that is fine by me.
Next, both our boys know how to save. The single saved dollar a week has turned into hundreds in the bank. They save their birthday money, and usually divide up that money the same as their weekly $5. It is a small competition between Nathan and Benjamin to see how much cash they can have on hand, while saving what is expected. Believe it or not, the boys have about 60 bucks each for their spending pleasure. We ( Erika and I ) would not have ever saved money like that in our youth, it would be long gone, the moment we had it.
Also, since it is expected that they serve a mission, and that they are to pay a significant portion of the expense, it is great that they have started early. Just like when your kids pay for their own bike, they take care of it better. Hopefully, they will have a more meaningful experience serving, knowing that it is their money being used.
Last, they get to learn to give. Paying tithing, or some other kind of giving is a great thing to learn at an early age. It helps keep selfishness in check, and give them the opportunity to see their contributions help others. Often they are helping each other cover some expense too, and are willing to share when needed.
Just to be clear, we do pay for things outside the normal base necessities. However there usually is a ‘Meet me half way’ type agreement. For instance, Nathan wants to go take some skiing lessons next month, he will pay half, and mom and dad the other. Ben wanted a new bike this summer, we met half way on that too. It really does go a long way, having your kids save, earn and spend money on a regular basis.
I found this interesting article today on the subject, and found the comments on the post just as interesting as the article.