Breakout for allowance- 30% college, 40% spend, 20% charity, 10% future.. ?

[Anonymous]

How about 20% to random lady from DCUM?

[Anonymous]

Anonymous wrote:Why make them give to charity? I don't know if they will see it as giving freely to something they believe in if its a chore. I always resented being forced to give at church, though I also hated church. Do you have a plan for them to choose a charity or is it something at school?

18:54 here. My kids like it. We talk about how they want to spend it, the impact it's going to have, etc. It's less about making them spend their money for charity and more about giving them a structured way to think and talk about opportunities to help other people.

[Anonymous]

Anonymous wrote:I disagree vehemently with a hands-off approach that passively says kids will learn to save on their own without explicit structures put into place by parents. This comes from me spending every paycheck to zero until I was nearly 40. Yes, some kids are just natural savers, like the one above who wants to be a millionaire. But many of us will spend whatever we have available to spend, always. I never had impulse control with money modeled to me, and while intellectually I knew I needed to save (I'm as book smart as they come), it me we translated to action. I have no habit of self-denial.

We do 2 things: we talk a lot about budget and finances. Our kids know how much things cost. They see us making financial choices in front of them.

Two, structure the behaviors with money that we hope will become habits. One is the YNAB principle of giving every dollar a job. We don't use percentages b/c that message for your allowances. So for a 7 year old, we say 2 dollars are for saving and 5 are for spending. We figure $20 spending a week is pretty high.

I would argue that telling your child exactly what to do encourages them to be far more passive than encouraging them to think and make decisions for themselves about their money.

My kid has had the experience of spending all his money and then having to turn down an opportunity he would have enjoyed. He's also had the experience of having saved up every penny for almost a year to buy something that turned out to be a dud, because he got sucked in by some TV advertisement. Once I let him plan a substantial amount of our budget for a family trip to Florida, and he made some really weird choices, some of which turned out to be great, and some of which he turned out to be weird. But all of these experiences are learning experiences, that wouldn't have happened if I'd taken the control out of his hand. I wasn't passive about them, there was lots of talking, and strategizing I just wasn't controlling about them.

To me the "habit" I want my kid to have is thinking carefully about money, and making deliberate rather than impulsive choices. I don't see how your kid is learning that through your method.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I disagree vehemently with a hands-off approach that passively says kids will learn to save on their own without explicit structures put into place by parents. This comes from me spending every paycheck to zero until I was nearly 40. Yes, some kids are just natural savers, like the one above who wants to be a millionaire. But many of us will spend whatever we have available to spend, always. I never had impulse control with money modeled to me, and while intellectually I knew I needed to save (I'm as book smart as they come), it me we translated to action. I have no habit of self-denial.

We do 2 things: we talk a lot about budget and finances. Our kids know how much things cost. They see us making financial choices in front of them.

Two, structure the behaviors with money that we hope will become habits. One is the YNAB principle of giving every dollar a job. We don't use percentages b/c that message for your allowances. So for a 7 year old, we say 2 dollars are for saving and 5 are for spending. We figure $20 spending a week is pretty high.

I would argue that telling your child exactly what to do encourages them to be far more passive than encouraging them to think and make decisions for themselves about their money.

My kid has had the experience of spending all his money and then having to turn down an opportunity he would have enjoyed. He's also had the experience of having saved up every penny for almost a year to buy something that turned out to be a dud, because he got sucked in by some TV advertisement. Once I let him plan a substantial amount of our budget for a family trip to Florida, and he made some really weird choices, some of which turned out to be great, and some of which he turned out to be weird. But all of these experiences are learning experiences, that wouldn't have happened if I'd taken the control out of his hand. I wasn't passive about them, there was lots of talking, and strategizing I just wasn't controlling about them.

To me the "habit" I want my kid to have is thinking carefully about money, and making deliberate rather than impulsive choices. I don't see how your kid is learning that through your method.

+1 To me, I see the skill of saving growing as my kids make choices to save for something they really want and then enjoy it, vs. blowing their money on random stuff and then not having money when something they really want comes along. It's a more impactful way to learn that lesson than just forcing them to save.

For those who require a certain amount to savings -- when do the kids get to spend what they have saved? Are they saving toward a particular goal?

[Anonymous]

Also, the "your money, you decided what to do with it" approach only works IME if you are very firm about not buying them stuff. My kids rarely ask for toys, candy, etc, when we are out because they know the answer is "How much do you have in your bank?"

[Anonymous]

+1 To me, I see the skill of saving growing as my kids make choices to save for something they really want and then enjoy it, vs. blowing their money on random stuff and then not having money when something they really want comes along. It's a more impactful way to learn that lesson than just forcing them to save.

For those who require a certain amount to savings -- when do the kids get to spend what they have saved? Are they saving toward a particular goal

PP, I do not tell my kids how to use their money, except that they are required to give birthday and Christmas presents to siblings and parents, which they are free to make or buy. But all of mine are savers - as am I. Two of mine are saving for jeeps (they are 7 and 12). They have been researching used jeeps online for a long time and have figured how much they need to save per year to get themselves one by their 18th birthday. They are very proud of their bank accounts. I direct deposit their allowance into their accounts once a month and if they want to make a withdrawal, they let me know and I take them to an ATM. The benefit of this is that they don't tend to blow money just because it's in their pocket.

I cannot imagine how much you would have to give your kid in allowance if only 40% was for them to spend. A day at the movies is $20 (including bus fare and a small snack), a snack at the mall is $5. If you were only going to let them spend 40%, you would have to give them $50 per week if you were going to let them go out with friends. That's way more than I give. The conversation does remind me though that my oldest is ready for a raise in allowance because he goes out more and I want it to come out of his money.

[Anonymous]

Anonymous wrote:I disagree vehemently with a hands-off approach that passively says kids will learn to save on their own without explicit structures put into place by parents. This comes from me spending every paycheck to zero until I was nearly 40. Yes, some kids are just natural savers, like the one above who wants to be a millionaire. But many of us will spend whatever we have available to spend, always. I never had impulse control with money modeled to me, and while intellectually I knew I needed to save (I'm as book smart as they come), it me we translated to action. I have no habit of self-denial.

We do 2 things: we talk a lot about budget and finances. Our kids know how much things cost. They see us making financial choices in front of them.

Two, structure the behaviors with money that we hope will become habits. One is the YNAB principle of giving every dollar a job. We don't use percentages b/c that message for your allowances. So for a 7 year old, we say 2 dollars are for saving and 5 are for spending. We figure $20 spending a week is pretty high.

If I was giving my 7 year old $20-30/week I'd probably give them guidelines too. I think we were doing more like $5/week at that age so allocating here or there didn't make sense. And it depends on the kid. One of mine used a lot of his allowance/gifts to buy stocks a couple times a year. This kid actually made some good bets and has a pretty decent portfolio.

[Anonymous]

We do not require a breakdown. It's simple.
When kid is in Target or CVS or anywhere and asks about buying "x," we simply ask, "would you like to get this with your money that you've saved at home or take a pass...place on bday/holiday list etc." he usually answers "pass" on these impulse purchases. For better items, he puts them on a gift wish list, or he works towards earning this super prize resulting from additional house chores like helping with yard clean ups, good behaviors, great grades, etc.
At this age, it is my and DH's jobs to save for college IMO.
We all donate $ and in-kind to charity. As a pp said above, I want to make donating a positive experience.

[Anonymous]

I forgot to add that DS, on his own, has decided to save almost all of his money for a nice house.

[Anonymous]

We don't give allowance, we make them work around the house.

[Anonymous]

Anonymous wrote:We don't give allowance, we make them work around the house.

We give an allowance that is not attached to chores. Everyone has to do chores because that is how families work. Don't want to do your chores? OK, you just lost a privilege.

They get an allowance to learn how to handle money. I once read that families that don't give allowance end up giving their kids just as much money, only it's not predictable. My kids know what's coming in: how much and when.

And they choose to donate to charity, which I am happy about. But it's their choice.

[Anonymous]

Yeah, right. I give my kid 5 bucks a week and let him save for college. And he better have the money together by the college time!
It's great to teach them to save, but let's stay grounded in reality.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We don't give allowance, we make them work around the house.

We give an allowance that is not attached to chores. Everyone has to do chores because that is how families work. Don't want to do your chores? OK, you just lost a privilege.

They get an allowance to learn how to handle money. I once read that families that don't give allowance end up giving their kids just as much money, only it's not predictable. My kids know what's coming in: how much and when.

And they choose to donate to charity, which I am happy about. But it's their choice.

+1 If you are paying to do regular chores, then that seems to give the kid the option to say I don't want the money so I'm not doing the work.

We do pay for the occasional above-and-beyond job.

[Anonymous]

I pay them specific rates for specific sets of chores. Chores tend to increase in complexity and quantity by age in order to justify 'better' allowance.

I pay them say $10.00 a week. I encourage them to donate $1.00 to a 'charity' pot in the house but this is completely up to them. This money is then donated as they choose after it accumulates. I also take $3.00 per week from them and put into the 'community benefit' pot. I tell them that taxes will be a part of life until they die so better get use to it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We don't give allowance, we make them work around the house.

We give an allowance that is not attached to chores. Everyone has to do chores because that is how families work. Don't want to do your chores? OK, you just lost a privilege.

They get an allowance to learn how to handle money. I once read that families that don't give allowance end up giving their kids just as much money, only it's not predictable. My kids know what's coming in: how much and when.

And they choose to donate to charity, which I am happy about. But it's their choice.

+1 If you are paying to do regular chores, then that seems to give the kid the option to say I don't want the money so I'm not doing the work.

We do pay for the occasional above-and-beyond job.

This is our approach (and how I was raised). You do chores because you're part of a family. You get allowance because you're part of a family. Chores are not your "job," they are things that need to be done. I don't get paid to do laundry, kids don't get paid to make their beds. We do sometimes pay for above-and-beyond chores, but not the routine ones.