Friday, August 15, 2008

Making allowances

Before I forget, I thought I would put in a totally unpaid commercial for my favorite brushes for kids, the Goody Ouchless Brushes. We have several of these - fat paddle brushes with flexible "bristles" that really ARE almost impossible to get tangled up, even in long brown hair. I LOVE THESE BRUSHES.

And get this - I saw on their website that they have a round brush with retractable bristles! How smart is that? Of course, my kids would probably still figure out a way to get that thing hung up in their hair. Oh, the challenge of it all.


And now, on to my subject of the day: Allowances.

I know there is a lot of controversy with this subject. Some people have a hard time with allowances. I really don't. I see it as something we would be giving to our kids anyway (food, clothing, shelter, and even gifts) but teaching them how to manage it.

We have given allowances around here on a very haphazard basis over the years. Since it's hard for a kid to get a decent job nowadays, we've also paid (minimally) for jobs that are outside of ordinary chores. So they've had some experience with money in their hands - saving it for something special, and sometimes... blowing it (here's a prime example of that!).

Like a lot of things that start out with good intentions, we've wanted to do something, but can't figure out quite how to make it work on a day-to-day basis. A couple of years ago, I even went to the bank and set up savings accounts for each of the kids so that I could use online banking, thinking that would help. But (what do you know) kids always need cash, something I rarely have, so that went virtually unused.

Then we've had the problem of allowances not being enough to really cover anything big, like back-to-school shopping.

But I still have hopes. I want my kids to know how to manage money. Not just to save it (I grew up with little and became an excellent saver, but to this day I have trouble spending money!), but to be able to give Biblically, plan for the future, and spend what's left over wisely.

I don't want them to get their first job and see that huge [minimum wage] paycheck and either (like me) not be able to spend it, or worse, think they can blow it all on the first thing they think they "need."

In a perfect world, I'd like to give my older kids a large enough allowance so that by the time they get their first job - and certainly by the time they leave home - they would know how to budget for all their own "stuff": clothing (beyond basic necessities), special "toys," outings with friends, friends' birthday presents, youth group trips, and eventually - gas.

These are all the things they ask for (and we generally provide for them - minus the toys, unless it's a birthday/Christmas gift) anyway. But maybe if it came from their own pocket, they'd see how quickly a few trips to Subway eat away at their account balance. Somehow it does not seem to faze them when it eats away at MY account balance.

Anyway, this week I brought up the subject of renewing allowances (or at a minimum, giving a more consistent one!), for the older three kids (ages 10-14). This included a contract they would have to sign, stating the things that Mom and Dad would no longer be footing the bill for.

One of my children immediately starting figuring out how long it would take to save for an item on the wish list ("I could get a notebook and keep a list of everything I spend!"). Another really didn't care, because this person does not spend much anyway.

But one person immediately got on the internet and began searching for a fancy cell phone (including the upgraded monthly cost), "because I could afford it now."

Wait a minute. You are totally missing the point. ACK!

I would not be giving you any "more" money than you had before. You would just be able to "see" what we've been giving you ALL ALONG. Only now, YOU would be responsible to set that money aside in case you need some new shoes, some clothes, or if you want to go with the youth group on a mission trip.

At first there was this pitiful response of, "Oh, I won't need any new clothes!" Who are we kidding here?

Then it progressed to: "But Mom, you've always paid for that stuff for me!" Followed by a heated discussion about how "it's just not FAIR."

(Excuse me while I throw up. There, I feel better now.)

Sigh. I guess I need to start off a little smaller, maybe with just clothing only.

I would love to hear if any of you have had success with teaching your kids money skills, since we are obviously fumbling our way through this.

Could it be because my middle name is "close enough?"


Jen said...

None...Madison could care less. We still help her clean her room. I feel there are other battles to fight with her so I pick and choose them....her room is not one of No allowances here.....we gave up.
She does however clear the table every night and wipe counters down and makes her bed daily,...I try not to complain since I get this much out of an eleven year old...

Leslie said...

I love the idea of the signed contract. It wasn't that long ago that my dad was trying to teach me all of this, and he did it in a very similar manner. The problem was that we lacked any/all consistency because my parents were divorced. If I ran out of allowance money, I could just go ask mom, who was completely unattached from the money-managing plan. So, I think not backing down and consistency are both very important. It would have done me a lot of good to be presented with no other out- this is your money and when it is gone, it is gone.

Take heart, though, I think the fumbling is inevitable, and the things you say won't go to waste, even if the results aren't immediate. I didn't quite latch on to what my dad was trying to teach me when I was in middle/high school, but I am really thankful for it now.

Timmarie said...

Dave Ramsey is an excellent resource. He has different ideas for kids of varying ages.

Marian said...

I have no wisdom whatsoever from personal experience. Not having cash, being inconsistent,etc. have all plagued my efforts, too.

In a discussion on my adoption list about kids and the "gimmes", one mom of many said that she has done the following successfully for years with her older kids: Once a year, she gives them each a set sum of money. After that, they're on their own for clothes, CD's, anything they want beyond what mom offers on her own, according to her budget (eating out, etc)... She doesn't even give them birthday presents. Obviously, the basics are all covered for them-- everyday food and some eating out with the family, house and utilities, insurance, and so on-- but beyond that, they really have to start managing money and mom's not on the hook for any manipulation. They HAVE to look at everything they may want/need for the year, and make a plan.

I don't know if I could do things exactly the same way, but it has given me a different idea to ponder and possibly adapt later.

Julie said...

My husband's parents did a great job of teaching their boys how to manage money. I don't remember the details (because I'm not much of a detail person : )) but they had their own checking account in elementary school I think that they had to use to buy lunch tickets, clothes, school supplies, etc. It was a joint checking account with his parents. I believe they had credit cards quite early too. See? No exact details. If you're really curious I can have him email you the details. We're going to do the same thing with our daughter when she gets older. Oh, and my husband definitely takes care of the money accounts at our house!!

Laura said...

I've started up allowances again and will have it automatically transfered into their accounts each week. We still have to do the details on what they will each be responsible for now. I'm liking the contract idea.

Have a great weekend!

Julie said...

My kids seem to want to keep there money and not spend it. Larry Burkette had a money thing out there for kids.

Kelli said...

A few years ago we gave our oldest (then about 12) a lump sum to pay for clothes, yearbook, school supplies, field trips, etc. During that year, it was painful for her as she realized she had to make choices--$50 jeans or a yearbook...$30 shirt or a few from the clearance rack...a new backpack or new lunch box (or neither since both of them were still in great shape!). During that year, she truly learned the value of a dollar (at least as much as a 12 yr old can). The following year, she begged us not to put her through it again. That let me know it must have worked!

Since then, she has learned to bargain shop with the best of 'em and she is more reasonable in her requests and expectations...except for the new cell phone with all the bells and whistles that she just doesn't understand why we won't purchase for her.

Although we haven't used that method since, it was a perfect way to jolt her into financial reality. It accomplished what we wanted at the time. Now, she earns money babysitting and we provide her with basic clothes and school supplies and foot the bill for school-related stuff. Anything above and beyond she pays for with her money, including her (prepaid) cell phone. I'm sure we could be using a more structured approach, especially with the three younger ones not too far behind her, but for now this seems to be working just fine.

I can't wait to hear about what you come up with!

Nancy said...

My girlfriend had much success with this ... a contract stating the child (a freshman high school girl) was now responsible for all her own personal items such as shampoo, conditioner (since she liked the more expensive brands than her mom purchased), sanitary items, makeup, etc. The amount also included one lunch per week to be bought from the school cafeteria rather than brought from home, and a fixed weekly rate for doing agreed to chores around the house. Now it was up to her daughter to make that money last through the month so if she spent it all on silly "needed" items and was broke by day ten, oh well. The mom agreed pay school fees, clothing, etc., until the daughter had a job and then they renegotiated the contract. The mom paid for car insurance, the daughter paid for gas when that time came. And the caveat was that once the daughter had a job, one third of the money went to savings, one third to tithing so she really only had one third of her earnings to "spend". Worked well for her. With my three kids I never paid for car insurance for them and also insisted that the "deductible" of our policy be in their savings account once they started driving in case of an accident (I have been lucky as none of my children ever had to use this money). I have never paid for their cell phones. But I did pay for clothing and the like. Good luck!

Marcia Francois said...

Oh, Katherine, I'm BIG on allowances (or as we call it in SA, pocket money).

My parents paid for all our stuff and when I started working, I went wild, spent up a storm and had lots of debt.

The good thing is I learn VERY quickly so after 6 months of this, I wised up and ever since then (about 15 years ago), I've been great with my money - i think I have a nice balance of saving & spending after tithes - and of course, I even have a financial freedom e-course :)

Marcia from Organising Queen

Name: Jenni said...

I don't have any experience with my own kids yet..they're all too young. But, my parents did what you're doing. We all sat down, signed the contract. I got a set amount each month and was responsible for my own clothing, activities out w/ friends (bowling, movies etc), any eating out that wasn't with the fam, gifts for friends (birthdays & christmas). When the time came they did pay for my basic cell phone as they saw it as more of a safety thing for when I was driving (I had to reimburse them if I went over my min) and car insurance, but I had to pay for my gas.

This was easier for me than my brother, as I'm usually good with money. It all changed though too when I started working and had more money, but I was putting most of it into savings for college.

Sounds like your doing a good job, even if you feel like your fumbling through it, your teaching your kids valuable money managing skills!

Mozi Esme said...

Wonderful post! I've been wondering when to introduce allowances etc. into the picture. I've got the same goals as you, but as you've shown, I guess every kid is different . . .

Anonymous said...

With my kiddos, we don't give allowances for cleaning the house or keeping their rooms up, or even for mowing the lawn.

We do, however, give them allowances for their grades. Every term they receive a certain amount of money based upon their grades, and each year they get a raise. With this money, they can buy the things they "want" that we refuse to buy them all year long. It teaches them to think about what they really want to do with their money and how they want to spend it.

If my daughter knows she is going to be short, and doesn't want to wait until the next report card, she'll ask: "Mom, what can I do to earn some extra money?" This summer, I gave her a list of 20 thick books to read. If she read them all by end of summer, and wrote a one-page report on each, she'd get $50 when school started.

When my son had a reall difficult time his first year in football, he was an academic not a jock, we "bribed' (err encouraged) him by giving him something to look forward to at the end of each week--$5 a week until the season was over.

My husband and I believe that because children go to school all day long, it's like work. In the real world, you work for money. But you don't work for keeping your house clean or running errands.

My daughter, now 13, doesn't really ask for a lot of "stuff". She does, however, have a running list of things she wants to buy with her report card money and it changes several times before she actually spends it.

Julie said...

We give our teenagers $20.00 a week in spending money. If they want to go to the movies, bowling, etc. they have to use this money. If they need extra money we will pay them for washing cars, etc.

I notice they have started going to the cheaper movies, and asking for bowling coupons.

This year I also gave them a set amount for school clothes and took them to sales so they could see how there money could go farther. One shopped the sale, the other didn't and only got half as much stuff.

This plan is working pretty well for us and saves me from the "mom I need a few dollars go around" that seemed to be happening with no one really keeping track of how much money everyone was spending.

For the younger kids I keep track of allowance for them on the computer (5.00 per week) and they can see their balances. I found that when I gave them cash they would lose it so I started doing it this way. I keep $100.00 in cash in a cupboard where I can give them money out of there account as they need it. They like watching there money go up and down.

Consistency is hard, but I am really working hard on this as I also want my kids to understand about handling money.


Andrea said...

For the most part, we give my oldest (14) a monthly allowance and she buys her own clothes or "toys".
Anything that we do as a family we usually pay for.
Anything that she does on her own, she pays for.
Occasionally we will "gift" her with money to use however she likes.
(with the expectation that there is no complaining, etc, if we ask her to do certain "other chores" not on her list.)
As far as tithing and such I need to be better about teaching her that. She has freely given money to certain causes in the past which makes me see her generous heart.
She is really a "saver", and I try to encourage that. She looks for deals and will usually buy things on sale or at the "cheap store". All this was learned by giving her money and letting her decide how she will spend it. (making her buy her own things, etc.)
It works for now, but with older multiple kids I do see the need for a system.
Good luck. I know it will be great.

Mo said...

I don't have any experience with children of my own, but I do have experience as one of six kids. My mom created a pretty detailed and sophisticed chart that she hung on the refridgerator. It included all household chores that were "above and beyond" the day-to-day things, such as mowing the lawn, mopping floors, walking the dog, or deep-cleaning the bathroom. Each chore was worth a set amount of money, according to difficulty. Throughout the week we had the freedom to do any chore that hadn't been done that week, and if she approved of the work we did she would initial it in a color specific to which child did it. At the end of the week, she would give payouts to each of us.

My parents always covered the necessities, like clothing and food. Our chore money was for things like CD's, games, or hanging out with friends. The chart method really helped teach us that the harder you work, the better the payoff.

Once we turned 16, we were required to get our own jobs if we wanted to drive, since our parents didn't pay for our gas or insurance. This was the point I learned the most about saving and budgeting. Of course she helped us budget, but this was really the point where we were on our own to figure out what works.

Hopefully that helps you a little! It took some organizing (as everything in a big family does), but it certainly worked better than any other method we ever tried out.

Sharon said...

I tried this with my older daughters (now 22 and 19). They didn't want to be responsible fIt didn't go over so well when they were 14 and 15. They didn't want to be responsible for their contact solution and shampoo or their clothes. We did it for about 6 mos. and I just decided it wasn't worth it. However, they were babysitting at the time and earning their own money. I told them that as long as they were earning money, they no longer would get "subsidies" from me..meaning if they wanted anything that wasn't a "need" they would have to purchase it with their babysitting money. College presented a different situation, as I told them that all of their expenses were now theirs. (not tuition or room and board) but books, cell phone, gas, car insurance, etc.. They had to work all summer (they had a specific $$ goal to reach) in order to pay for all of their expenses. My oldest daughter is now student teaching (nonpaid) to get her teaching license and had to earn at least $6000.00 this summer to cover expenses through December. I'm proud to say she worked very hard and met her goal, taking on extra jobs like dogsitting.

Sorry for such a long post, but I guess my point is that they truly will "get" it when they start "earning" the money with real jobs. At least that was my experience.

I give my younger two an allowance each month, and I don't buy them anything they don't "need". They have to spend their allowance for that.

P.S. I love your blog, and I love what you have done with your new home! :)