By Beth Watson
Sometimes I invite my kids to go shopping with me, or for some reason I have to take them.
What used to be a tense outing full of requests for toys, clothes, and snacks is now much calmer thanks to a strategy our family’s been following for about eight months.
With help from a great finance book called The Opposite of Spoiled, I’m working toward turning my kids from whining brats into masters of their own little stashes.
I checked out Ron Lieber’s 2015 book from the library last spring after reaching peak annoyance over my children’s snack purchases on their school lunch accounts as well as their incessant requests for a “special drink and snack” from any convenience store we drove past.
The Opposite of Spoiled boasts many strategies for helping kids be money wise and grateful. I’ll explore more in the future, but right now I’m just reporting my findings after trying Leiber’s suggestion of giving your kids an age-appropriate allowance.
Lieber’s allowance strategy doesn’t tie money to chores. Kids get an allowance for the same reason they do chores and schoolwork: because they are part of the household.
Just like adults, kids have a wants list. Giving them an allowance presents a low-stakes way for them to start managing money.
My kids are 7 and 9, close enough that I give them the same amount: $10 a week. Each child must set aside $5 for spending, $1 for giving, and $4 for saving. Piggy banks with those categories labeled help them keep an eye on their stashes.
If a kid goes shopping with me or my husband, she may grab her little purse or he might grab his wallet.
The best part? No more being the mean mom at the store. No more meltdowns.
Surprisingly, the requests for treats ceased immediately. My kids are way more careful with “their” money than they are with mine.
The school cafeteria manager helped me zero out the lunch account and put my kids on cash-only status. I think my kids have taken snack money to school one time in eight months. On my nickel they were burning through $40 a month in sports drinks and cookies.
Other pleasant surprises include my son giving a friend $7 to buy a video game, and hearing how my daughter helped her brother when he didn’t have enough cash for something.
When I mentioned to the kids that they might consider donating to the church outreach fund during the holidays, one pitched in $5.
In accordance with our household vibe, the rules are loose. But in essence they are this: We pay for needs such as clothes and groceries, as well as outings we choose to take you on. You pay for any toys, stuffed animals, souvenirs, or treats you want (and can afford), as well as any outings you initiate.
“Give” means “doing something for others.” “Save” means leaving the money in there for 3 months.
As generous as $520 per kid annually sounds like, I estimate it has saved much more than that when you consider all the snacks, fast food, and trinkets NOT purchased.
While it pained me to watch my 7-year-old daughter spend $4 on candy during a recent store run, I hope my goal of letting her run short of money in a safe environment will encourage care with bigger amounts later on.
Besides, when the kids ask if we can get takeout instead of eating at home, it’s fun to ask, “Are you buying?”
The biggest hassle so far in implementing a weekly allowance has been remembering to have cash on hand, so I try to grab $20 cash back in $5 and $1 bills when I’m in a store. There are debit card options for this type of system, but I feel like cash works best right now.
(On a side note: The one time my son asked to order a stuffed chicken online, I made him wait a week to see if he still wanted it. Seven days later, he brought me $20 and told me to click “purchase.”)
There are many ways to teach kids about money. I realize I am an older parent of younger kids, so I have the privilege of more stability and life experience that all do not enjoy. This is my experiment, and it seems to be working. For us, it’s helped our relationship with our kids to not be the gatekeepers of small purchases. They’re empowered; we’re liberated.
Here at Corner Post Financial Planning, our clients run the age spectrum. Some are still helping school- and college-aged children launch, while some are spoiling their grandkids. Still other clients provide support to adult children out of necessity or for other reasons.
We are interested in your thoughts. If you have had success or challenges in teaching your kids or grandkids about money, what worked? What didn’t? Send me an email!
Beth Henary Watson is a Certified Financial Planner TM Professional with Corner Post Financial Planning.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through ICA Group Wealth Management LLC, a registered investment advisor. Corner Post Financial Planning and ICA Group Wealth Management LLC are separate entities from LPL Financial. LPL Financial does not provide tax or legal advice.