Sassy's room is decorated in Butterflies, and pink and white gingham. Very little girl. And she is growing up. Some of her butterfly deco is falling apart (it is about 5 years old). And she has expressed an interest in changing a few things. Fair enough.
One thing she said she needs is a new piggy bank. When we asked why, she said "this one is too full." (Ah, to have such problems!) We said she could just give us all her money, and then her bank will be empty. She said OK. (hee hee)
The conversation continued after I left the room between G-man and Sassy, and apparently Sassy would like an allowance. G-man said that an allowance would be linked to responsibility and that she would have to earn it.
(hmmm.....not sure if he and I are on the same page. I agree that she should do chores, but that is part of being a family...not just for cold hard cash.)
Anyway, as their 8th birthday approaches, it really is time that they have some rudimentary money lessons. Right now, any money they get just goes into their piggy bank. We buy all of their stuff. They don't know how to spend money!
Now, neither child is the type that wants all sorts of things. We have never been in the habit of buying them tons of stuff, and they don't ask. But they need to learn how to save, how to spend. And that is our job as their parents....to teach them. Plus, I don't want them blogging 30 years from now about all their debt.....
So, I think we are going to start giving them an allowance at their birthday. (Not that we really have it in our budget, but I will figure that one out). I am not sure of the amount. The only thing I am sure about is that part will go into long term savings (no touching that!!), part is for spending (and we will teach them about budget and saving for a goal), and part will be for charity (because they need to understand that not all people are as fortunate as they are.) So, the amount will need to be easily divided, and we will give it to them in appropriate denominations so they can quickly put it where it needs to go.
I am thinking something along the lines of a weekly allotment such as:
$2 - long term savings
$2 - spending
$1 - charity
That is $5 a week. They are only 8, so I don't think they really need more than that. And if they would like to earn extra, maybe a "job jar" they can pick from?
I am a crafty gal...so I will probably take some boxes and cover them in paper and make a slit for the money. Instant bank.
As for the piggy bank....I am not sure how much is in there. I counted it a long long time ago, and it was more than I thought (I was watching Suze Orman, and she said in a dire emergency, borrow from your kids if you have to! So I was curious how much there was). The grandparents usually feed the piggy when they visit, but I never asked how much they put in there....apparently, it was mostly $20's. If I had to take a wild stab at it....they each probably have $500 in there.
Maybe for their birthday we open a savings account for them, and get some CDs. I am not savvy on this, so I have to look into it.
What are your thoughts?? What do you do? What am I missing?
I like the idea of getting CDs for the money that is already in their banks. You'll get a better interest rate that way.
ReplyDeleteI especially liked your thoughts on allowance not being for doing chores. My parents used that system, and it backfired in a big way. My brothers would not do anything around the house until they needed money. And my parents would give in because they wanted the chores to get done. Not a good system at all!
When I was a kid, my mother gave me money to spend at the video arcade every weekend. $10 or so.
ReplyDeleteShe meant well, but it taught me nothing about money or how to handle it. It did not teach me about working and earning money. Had I worked for this money, I would have thought twice before spending it- likely would have even saved some for things I wanted.
I agree with Dave Ramsey- kids should be put on commission. Work get paid, don't work you don't get paid. Just like the real world works. Give kids jobs around the home. Some jobs they do because they are helping the family. Other jobs you can pay them for it. Pay for completed work and work that is done well.
@Red - I think that is one problem with the pay for work....unless you instill a proper work ethic, people will only work because they want the pay. And if they don't need the money...they tend to slack.
ReplyDelete@Financial Bondage - This is one area that I veer from Dave. While I do think teaching kids how the real world works, I don't necessarily think that an allowance should be tied to doing things around the house that are part of helping out as a family member. This is why I am considering the job jar...where this is pure work for cash. Don't do a job, don't get the money.
And as for job well done....that one is subjective. My kids are only going on 8, and with a special needs child...."done well" is in the eye of the beholder.
Not all jobs need to be paying jobs. some things around the house should be done for free, because the kids live there. Other chores they do and get paid for. Larry Burkett has some pretty good teachings on this area.
ReplyDeleteJob jar sounds like a neat idea.
@Financial Bondage - I think that Sassy would understand what you are saying. But Bossy....not so much. Autistic kids have a hard time with blurry lines. But I think he will understand the main concept....and the job jar.
ReplyDeleteAny one have some suggestions for the job jar???
I don't know if this would work for your kids because we were older, but my mom used to pay us for "deep cleaning" only. We still had to take out trash, load/unload dishwasher, keep our crap picked up, etc. as chores, but for a sparkling clean bathroom or kitchen, baseboards, scrubbing floors, whatever, we got paid.
ReplyDelete-Whitney
I definitely wouldn't take the $500 your children have saved, but how about putting it in a college/long-term savings account for them?
ReplyDeleteOh, we had no plan on TAKING the money!! It was a joke. We are looking into how to invest the money for them for long term.
ReplyDeleteI have 3 kids, they have all received an allowance since they were in Year 1. (Here in where I live age 6). This was not tied to work in the home. This was what they could spend on sports training day, and they had to save a little of it. They had a piggy bank for savings. If they wanted an item that we did not want to buy they had to use their savings. For instance, we were happy to spend a certain amount on a bike. Our eldest son wanted a bike that cost more than we were prepared to spend. He chose to put the extra money from his savings to the bike of his choice.
ReplyDeleteNormal household chores were not paid for. So dishes, keeping their room clean and tidy, filling the wood box etc, was just part of family life.
Extra big jobs around the house or farm they could earn more if they wanted extra money.
At present, my youngest (17) earns part of his money for keeping the lawns mowed, (we have an extra large lawn) and watering for the orchard and lawns in summer. My husband works away for 2 weeks and is home for 1 week at a time all year round. This helps me out.
He still does the dishes, does his own washing, and cooks meals as part of normal household chores, and does not get paid for this.
I'm a little late, what have you decided on this? I like the job jar: concrete for Bossy. Ideas... Seasonal work? Like outside stuff now? Cleaning up debris, bagging up weeds? (May not be able to pull them...)(At least not well;)
ReplyDeleteOne idea is to have their rooms their responsibility: picking up; dusting; etc. And they can't earn from the job jar unless and until their regular chores are ok'd. And the job jar could include dusting the other parts of the house, sweeping the kitchen floor, etc. Just some thoughts.
We definitely decided on the $5 a week per child, and the dividing it all up. The rest is still a work in progress. The job jar....we are leaning toward pink and blue slips, so we can make jobs appropriate for each kid. I do like the idea that all their regular stuff has to be done before you can dip into the job jar!!
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