Given I work in the financial services space, I am acutely aware of the lack of knowledge consumers have when it comes to managing their money. I’ve talked to college grads from some of the greatest schools in our country, yet when it comes to knowing how to buy a car, they know nothing. It’s scary and sad, and it reveals financial education is totally missing in our schools.
I also know many teachers, and their time is pretty maxed out when it comes to cramming curriculum into the brains of our kids. I get it – with the focus on testing and the zillion things they need to push – financial skills is not high on the list. No wonder we have a nation of people who can’t manage their finances!
OK, I’m off my soapbox now … but I share all this because this lack of knowledge has made me realize financial education needs to start at home. My kids are all fairly young, but I’m already talking money with my eight-year-old. We discuss savings, the difference between “wants” and “needs,” the importance of charity and how to make money.
This last topic – making money – has become a fixation for my eldest. He has gotten the message loud and clear that mom and dad can’t buy him everything on his wish list at a moment’s notice, so now he wants to figure out how he can bring in some dough.
Being that he is eight, he’s not ready to hit the labor market, but I do want him to get creative. He’s thought about selling toys – not sure he’ll get the $20 asking price for an old transformer. There was the Lemonade Stand – a childhood favorite. He has saved the cans and bottles to collect recycling money. And now, he’s hungry for an allowance.
I’ve read many different perspectives on childhood allowances. Don’t pay the kids for chores. Only pay them for extra chores. Pay them a weekly allowance for their usual contributions to the household.
Beyond that, there is the topic of how much to pay your child. What is appropriate for a young child? When do you cut them off? If they get an allowance, what do you make them pay for versus what the parents fund?
I know my husband and I need to get a strategy quickly, and given this plan of attack will likely be used for the younger kids in the future, we’re hoping to get it right.
In short, we’re thinking about creating a list of extra items – not the usual “making your bed and picking up after yourself” activities. If he does extra items during the week, he’ll make some extra money. Still, I’m stumped on how much we should be paying an eight-year-old. Two bucks a week? Five?
If we don’t get a contract in place soon, I think my son will start contacting the union!
But seriously, how have you tackled the allowance debate? Share your successes … or learnings.