Monday, July 16, 2012

Kids and Money

Vacation time is over. I am tan and relaxed. Time to get back to blogging and pondering how in the world I am turning 40 this month. Wow.

I had someone ask me about allowances and my take on it. What a great blog topic. It is so individual for each family and I have certainly wavered back and forth on the subject but here is what goes down at our household:

First, I think there are certain things kids need to do without being paid simply for being part of a family: They should keep their room tidy. They should take turns doing the dishes and do daily chores. They should participate in family yard work day. All this, gratis. No compensation other than the privilege to be living with the greatest family on earth and to be fed and clothed. 

Now, kids do need to earn money. They need to learn how to manage money and how to respect each and every dollar. They also need to learn how to work hard for what money they do get.

They have options there. They can go out and find work via babysitting, yard work, hitting up grandpa for work or finding some creative way to bring in the cash. They can also ask me for cash jobs. These are jobs that are outside their usual required chores and come with a certain assigned dollar. They can take them or leave them. It's up to them if they want to earn the money but money is not handed out for free around here. Life doesn't work that way and they need to learn it early. As parents, we cloth and feed them and pay their way if it is a family activity. If they want to do something with a friend or go spend some cash frivolously at the neighborhood store, that needs to come out of their own pocket. If they want some toy aside from birthday's or Christmas, they need to learn how to save for that item. 

Some of my kids love to do the extra jobs and earn the money. Some don't. The older ones figured out side jobs early on to earn some cash. They tutor, teach piano and guitar, babysit and do yard work. The younger ones are eager to follow in their footsteps. These jobs pay better than mom. 

So far, my children have learned, for the most part, how to be responsible with money. Most of them are very good savers as they appreciate every dollar they have earned. They are not quick to blow it since they won't get an automatic handout at the beginning of the week.

For our home, this works great and in hindsight, I wouldn't change a thing. It creates motivation to earn and to look for opportunities to work. In the real world, no one is going to pay you just because you make your bed. I would be rich if that was the case. I don't think it is ever too early to learn real life lessons.

My take. 


Lisa said...

Thanks for sharing. A while back you mentioned this. I latched on to your idea and have been doing it. I agree with your take on it.

Laura said...

We have a modified version of what you do. Most jobs in the house are just as you said, done for the joy of living here and being fed. My kiddos are younger, so they get an allowance, but it is small, and I do it to teach about finances. ($1 for my 6 year old and $2 for my 9 year old.) I got a 4 chambered piggy bank for each of them and they are required to pay tithing first, then they separate their money between investment (can't touch until they go to college/mission), savings (have to have an identified goal), and spend (you can do what ever you long as it is legal). The trick here is that I match investment money 2:1, savings money 1:1, and spend money not at all. They quickly learned that saving their money for later means they get more. As they age, the matching will fade out and the money will be moved to an investment and/or savings account. They may choose to do extra things for money, or pay their sibling to do their chores, if they wish. The hard part is letting them spend their money as they see fit. One side note: They are responsible for paying for anything they break, just as if you paid a bill. This money comes out after tithing but before matching. My kids became much more careful with each other's belongings when they found they would have to pay for breaking things. Eventually I will give them money for standard things they are required to pay for, such as money for haircuts, and gas for the car. If they spend the money on other items they will be limited in their ability to have me drive them fun places or get their hair cut. What I want is for them to learn how to manage their money for the future, and what happens when you can't pay the bills. said...

what a great lesson to teach your kids!

Marie said...

That is awesome that you can look back and wouldn't change a thing! And I totally agree with this stance.

My 5 yr. old just earned enough money to ride the flowrider. She really wanted to ride, so we provided extra jobs/chores outside she could do with a dollar amount that were not her regular chores. She slowly but surely earned it! We were proud of her, and she was proud of herself.

Tiffany said...

Love it! And I totally agree!! Do you still have a kid that teaches guitar? and if so do they have a spot for the upcoming year and how much? I want to put my almost 10 year old in lessons. :)

Shari Goodman said...

He is in college now and working so no more guitar! My daughter teaches piano if anyone is interested!

Linda said...

My cousin, Marie, should be calling you (your daughter, but I only have your phone number...) about piano.