08.28.08
Kids and Money: Teaching Our 14 Year Old to Budget
Our 14 year old just completed week 2 on a budget. To recap, week one he was given $50 to do a list of chores outside the typical “clean your room responsiblities”. Week 2, he was given $40 because he missed 2 chores on week one. We gave him the money on Sunday in order to teach him to budget his money for the next weekend. On week one, he had money left over to roll into week two.
During the 2nd week he bought an ITunes gift card, saw a movie and bought some miscellaneous snack items. When Friday came, he had $8 left in his wallet (the $8 was in addition to the money he is required to put in the bank each week). This posed a problem since he had already made plans for both Friday and Saturday nights.
On Friday he asked me for his weekly allowance and I reminded him that he doesn’t get it until Sunday. For some reason he drew a blank on this one - that was a fun conversation. I told him he has $8 left to stretch over 2 days and to be creative because he was not getting any money from us until Sunday. In addition, he was not permitted to take money out of his savings. Thankfully he did all of his chores this week so he could expect the full payment of $50 on week three.
So, he figured out how to have his cake and eat it too. He went to Starbucks to hang out with his friends Friday and only spent $3. On Saturday he went to Rockwells Restaurant and only ordered an ice cream dessert for $5 while every one else ordered dinner.
Did I feel bad? I must admit for a second I did feel bad but I got over it pretty quickly. The reason? We just taught him his first real life budgeting lesson and I saved myself money because a couple of weeks ago I would have just fished out another $20.
How disciplined are you with your approach to allowance? Do you find it hard to hold the line?
Stumble it!
Rosie : ) said,
August 29, 2008 at 10:14 am
Ooooh, this one scares me.
Our oldest is on the brink of doing all the fun things you mentioned. With our big brood, we cannot really afford an allowance. They have chores, and if they do them they get priviledges.
All their birthday money goes into a bank account, which is their savings. any money made during babysitting {our oldest} is kept and saved. At the moment, if there is something they really want, we buy it for a reason. For example, last year, they really wanted a Nintendo Wii. With the great marks they got during the school year, we felt it was appropriate to buy them their Wii as a reward. {the year before it was bikes for everyone}. This year for their marks, they wanted each a Webkinz. As for any other big items they want {our oldest wanted a nice desk and bookcases for her room}, we buy it for their birthdays.
In general, I buy the kids little gifts throughout the year, like DVDs they want, certain toys {our son has an almost complete collection of the Cars movies characters, which he has been building up since the movie came out}, and treats in general.
I guess my question to you at this point would be, we are showing the kids to put everything in savings, letting us buy the more expensive stuff. Is this a good example? Should we start an allowance? Or, should we pay them per job?
I never had an allowance, my parents gave me money for every job I did. So I was paid 1 $ per load {consisted of putting it in the machine, drying it, folding it and putting it away}, maybe 5$ for mowing the lawn and so forth… {ok, it was quite a few years ago, my parents were not cheap, I swear;)} With the 7 kids, is it possible for us to even budget for this? And how do we treat the random gifts we get them throughout the year? I worry that we cannot do both.
Thanks:)
CreditMom said,
August 29, 2008 at 10:27 am
Hi Rosie:)
I love your comments…they make me think!
Of course I can’t say what works for your familly because every family is different but we try to keep our lessons as real life as possible. That’s why we pay them for chores (not responsibilities) and force them to save from those payments. Afterall when they get a job, isn’t that the way it will be? You get paid for your chores and from that pay you need to balance your essential spending and savings.
We are finding something very interesting from this new budgeting plan. We do not permit them to leave home without their wallets. When they are in a store asking for something we say, “use your money”. You would be amazed at how unimportant that item becomes when they have to spend their own money. Isn’t that what life is about? Priorities?
Our younger ones don’t get $50 a week. They get $5 - $7 a week (or $1 a chore). The older one gets more because he must do more. Plus it includes his bus and lunch money for school. If he wants to save money he can brown bag it….again, a budgeting lesson. Now he knows if he wants to go out over the weekend he will have to brown bag it or else he stays home with Mom and Dad (something a 14 year old isn’t too keen on!).
BTW: are you on Twitter? If you are, I would like to follow you!
Thanks again for writing!
CreditMom
Rosie : ) said,
September 1, 2008 at 7:32 pm
I agree with you.
Although, when my kids bring their wallets to the store, they want to buy gum, lipgloss,barettes and even offer to pay for coffee or tea for us! they don’t seem to understand yet what money is “in the real world”. I think hubby and I need to sit down and have a good discussion.
As for Twitter, I have heard about it, but not joined yet. I might drop by and look at the website again.
Thanks for answering my millions of questions!
danielpaiva said,
November 5, 2008 at 11:20 am
I really love to try it out. This is something new
romina said,
November 11, 2008 at 5:07 am
I recently discovered this blog. I’ve had a similiar idea to your rewriting the ten commandments for some time now.
robert191 said,
December 12, 2008 at 4:22 am
Thanks for the post, I have been having the same problems.