A tweet yesterday about teaching financial literacy through allowances caught my attention, mainly because I’m expecting to start work shortly on a new client project that will engage kids with financial issues (in a green way, of course!… More to come on that when it’s finalized).
As @johnlanza said, allowances are a great idea.
BUT there’s so much more involved than simply handing over $x a week to spend on stuff…Especially if your values are trying to teach kids that we don’t need so much of the stuff that consumes our environmental resources.
A few years ago, when Big Boy was 5, I took a class in allowances at a wonderful local non-profit parenting organization, The Parent Encouragement Program. Their philosophy is simple: start allowances at age 5 to teach saving, spending, and charity, and adjust the allowance over time as your child grows.
We started at age 5 with $3 for spending, $1 for a charity of my son’s choosing, and $1 for savings. Very early on he grasped the concept of “saving” up for large purchases (you guessed it – Legos). It would take him 10 weeks or more to save up for a decent-sized Lego, but he did it. His first charitable donation was to the local Bethesda library.
Two years on, he’s getting $7 a week, with $4.50 for spending, $1.50 for saving, and $1 for charity.
Judging by the number of Lego pieces I trip over in our house, I think he’s got too much spending money. He’s deposited $272 in the bank, and he loves reading the bank statements when they arrive. (I miss the days of the old passbook savings accounts – which made the money somehow seem so much more tangible.)
But it’s the charity thing we’ve had the hardest time working on. Somehow, my complaints about Lego’s exorbitant prices have been misinterpreted. He became convinced that Lego must charge so much because they need the money. Therefore, in his mind, The Lego Company is a charity. And for several weeks, he was bound and determined to donate his charitable savings to The Lego Company. But of course, I wouldn’t allow it!
He’s now finally got the concept of for-profit corporations down pat, and as the note below attests, his charitable contributions will be flowing to Haiti and Chile.
I am donating $X to give to Haiti and Chile. I hope this money will help the people in Haiti and Chile for food and water.
Do you give your kids an allowance? What’s worked for you?
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