Did you get an allowance when you were growing up? As a young teen, I was awestruck at the notion of my peers getting five to ten dollars every week simply because they existed in their family’s home. In 1984, five to ten dollars went a long way! Having that kind of money at one’s disposal meant going to see the release of “Karate Kid,” heading to Pizza Hut with friends, or going to a summer carnival to ride the Tilt-a-Whirl and the Scrambler.
Although I did get to do all those fun teenagery things, I always felt as though I was at the mercy of my parents’ case-by-case financial discretion rather than being empowered to make spending decisions myself. Consequently, I didn’t learn how to budget until I was an adult. At that point, spending no longer meant asking an authority figure for money to buy this or go there. I either had the money to pay for the things I needed and wanted or I didn’t. I learned as a young adult
that if I didn’t plan ahead for the expected and unexpected, the money wouldn’t be there unless I wanted to go into debt. (I didn’t.)
Fast forward a number of years. When we had children, my husband Travis and I knew we wanted them to learn budgeting skills and financial “cents” (ha!) at a young age and gradually introduce them to more financial responsibility as they got older. Here is what we did at various ages and stages.
Our kids completed a “chore chart” each weekday. (See the blog post on that HERE.) They marked an “X” on the chart for each day they completed their chores. At the end of the week they would receive $.25 to $.50 to $1.00 per X (depending on their age). In addition, they received a woiner for each completed chore day. What’s a woiner you ask? It’s the words “coin” and “washer” combined and each one represented 20 minutes of screen time. My husband took an empty checkbook box, wrapped it in aluminum foil, and labeled it “Woiner Receptacle'' (which I think is hysterical). He cut a slit in the top so our kids could put a woiner into it whenever they had free time and wanted to play a computer game or a video game. They could spend as many woiners as they wanted in one sitting, but could not borrow woiners from their siblings. If they ran out, they would have to wait until their next payday.
They set a timer according to the number of woiners they had deposited into the receptacle. Yes, one child (who shall remain nameless) tried to cheat once. After that child forfeited all remaining woiners and was not allowed to earn more for two weeks, that issue never came up again for any of the kids. For sure, the woiners = screentime concept taught our children more about saving and spending than their earned cash at those ages! As an added bonus, our children received a paid vacation for birthdays. That meant they could forgo doing chores and still receive an X on the chart. (They also often chose to work ahead for school so their birthdays meant a vacation from both chores and school.)
Upper Elementary/Middle School
As the kids began to grasp spending and saving, we encouraged them to keep their chore chart money in envelopes labeled with words like “save,” “give,” and “spend.” Their “give” envelope contained a percentage of their allowance that they could choose to give to church and/or to a cause of their choice, such as buying chickens for a family in a third-world country. Two of our kids loved going to summer camp so each year we provided half the camp cost while they earned money for the other half. They discovered the joys of entrepreneurship by purchasing ingredients to make chocolate chip cookies and going door-to-door in our neighborhood, selling them by the baker’s dozen. They raised their portion of camp within a few hours each year and were able to practice good communication skills every time they made a pitch.
This was the magical age where each child went to the bank with mom and opened a joint checking account. This coming-of-age was simultaneous with earned income from outside the home. Delivering newspapers, babysitting, and roguing corn were the jobs our kids had at age 14. With this, they learned how to balance a checkbook and use a debit card responsibly. They also learned “the value of a dollar.”
When our children reached age 16, we began to pay them a stipend based on our average monthly expenditures for clothing, toiletries, and “fun money.” They were paid monthly so they would be empowered to make budgeting and purchasing decisions themselves, quickly learning the good and bad consequences of their spending habits.
We watched them cut coupons, shop for sales, and plan how long it would take to save for that extra-special pair of tennis shoes. (Whenever they received high-ticket practical items as gifts, they were so grateful!)
As high school students with more work options, our teenagers decided to get part time jobs in addition to their extra-curricular activities. Around this time we gave them a monetary gift for Christmas and my husband took them through the process of investing it in a mutual fund in their name. They were ecstatic to calculate how much their money would grow over the years if they were diligent in their continued investing. This opened their eyes to the concept of allowing a portion of their money to work for them in addition to them working for money to save, spend, and give. Also, before we graduated our kids from our homeschool, they needed to show us three examples of monthly budgets, each representing what they could afford for housing, expenses, giving, cars, savings, vacations, etc. at different income levels. This gave them a rough idea of what kind of standard of living they could expect based on what they chose to do after high school.
What I’ve realized along this financial journey is that our aspirations (whether they are buying movie tickets, purchasing a car, or donating a large sum to a favorite charity) are not limited by anyone but ourselves. I came to understand through my children’s experiences and my own personal development that when we want money for something, the money is “out there.” We get to create ways to acquire it and then manage it wisely, and these are life lessons not taught in a brick-and-mortar school.
Parents, let’s teach our children financial wisdom at every age and every stage. Mr. Miyagi (from “The Karate Kid”) would probably agree.
Daniel: Could you teach me?
Miyagi: First learn stand, then learn fly. Nature rule, Daniel-san, not mine.
Daniel: Where'd you learn it from?
Miyagi: Father teach.
Daniel: You musta had some father, man.
Miyagi: Oh yes.