Kids + Money

It's almost Christmas, my favorite time of year!  While I struggle to fit everything in to the next few weeks, I've also decided to tackle something we've largely ignored for a long time...fiscal responsibility for the kids.

Most of our kids' friends and friends' kids get some sort of allowance or spending money.  We've been late to the game for a variety of reasons.  The biggest reason being that BB and DD don't ask for much.  We usually buy them what they want after some thoughtful discussion so they've never felt the need for money.  But as they get older I'm concerned about them understanding the value of money.  Each of them approaches money very differently - which is fine - but it's still important to comprehend value and to practice spending and saving.  So last week I finally set up a weekly allowance schedule.

How allowance works
Earning their allowance involves personal responsibility for their homework, their activities, their space, their things.  Every day they are responsible for being on time for school, homework finished, backpacks packed with that day's supplies, hanging up coats and jackets, gathering and washing their own laundry, clearing the table, emptying a clean dishwasher, and other light household chores.  If that is all taken care of without too much prodding, they will get their allowance money for the week. There are weeks where they can earn bonus, for example, by doing special, heavier chores.

How saving and spending works
In order to keep track of their money, and hopefully have fun watching it grow week after week, C took them to open their own savings accounts with debit cards.  How cool is that?  Their allowance will be a direct deposit into their accounts so no cash on hand but with their cards, they can make purchases when we're shopping.  They also can easily reimburse us if we buy something using a credit card.

The rules
We agreed that the money can be spent on basically anything they want.  One of the complaints they've lodged is that they haven't had the freedom to spend their birthday/holiday money as they wish.  So I have reluctantly agreed to allow them to use their money any way they see fit (with some obvious caveats).  This will be the hardest part for me but I also realize how important this is for them to actually learn.

The benefits
For me as a parent, one of the core values I want BB and DD to have is fiscal responsibility.  By giving them the framework to exercise and practice this responsibility, I hope that they will be capable by the time they leave the nest.  I'm also hoping that they will build up a nice chunk of change for themselves in the meantime.

Our allowance regime also reinforces their personal responsibility, another core value that is important for me to teach as a parent.  Frankly, I love returning home in the afternoon to an empty dishwasher(!) and they have taken over all of their laundry, cutting my load in half!