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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]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. [/quote]

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.[/quote]

+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?[/quote]

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