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Parenting and Money:
What Kids Buy—With
Allowance,
You Can Teach Positive Saving and Spending Habits
By Kelly Nault
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It’s
an all too common scenario:
Child
says, “I want that.” Mom replies, “I don’t’ have any money.”
Child, trying to be helpful, quickly replies, “That’s OK, just
use your card.”
Unfortunately, the child in this story usually equates swiping
the plastic—whether a credit card or ATM card—with “free money.”
Without realizing it, many moms are teaching their children to
become future “spendaholics.” How? By overusing the credit
card—and by acting like their children’s personal ATM machine.
What
kids buy with their allowance teaches them good, solid financial
principles that will stick with them the rest of their lives.
However, what kids buy with your money (or with your
credit card, as the case may be) does little to develop their
understanding of sound spending and saving habits.
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What Kids Buy with Allowance—And Why Parents
Give Allowance in the First Place
What is an allowance for, anyways? An allowance should be given
to promote healthy money management. It should not be
given as compensation for chores. Chores are an everyday part of
being a member of the family. The praise and thanks for
completing chores is remuneration enough.
Some parents might ask, “Why give kids money for free?” Good
question! But the fact of the matter is, you already do
give them money for free by doling out cash for treats, clothes,
games, toys, books…you get the picture. Even without an
allowance, you’re still giving your kids “money for free.”
And this is why an allowance is so great: it allows you to keep
the spending on your children in check (actually saving you
money!) while teaching them valuable life skills at the same
time. Allowance shifts a lot of the spending decisions to your
children—and what kids buy with their allowance teaches them
practical financial lessons that last.
This doesn’t mean taking a 100% “hands-off” approach to
parenting and managing your
child’s spending habits. Instead, it calls you to help teach
them the basics of finances so they can go on to manage money on
their own. It requires you to set up guidelines for how much
money they can save and how much money they can spend. Then,
after the financial foundation is laid, what kids buy with
allowance is up to them. |
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Parenting Question: Can You Control What Kids Buy with Allowance?
On
page 178 of my parenting book When You’re About To Go Off the Deep End,
Don’t Take Your Kids With You, I discuss a money
management plan that both kids and parents can appreciate and
enjoy. I call it “piggy banking with a twist,” and here’s how it
works.
In
order to start receiving an allowance, your child simply has to
agree to use the “piggy banking with a twist” system. Instead of
having one piggy bank, you want them to have four!
The four piggy banks and their purposes are:
1. Super Savings
Pig
– This is your child’s long-term savings. As money
accumulates over time in this bank, your child will learn
the benefits of delayed gratification.
2. Play Dough
Pig
– This is your child’s fun money. It is to be spent on a
weekly basis for immediate gratification stuff like candy,
small trinkets, or whatever they want!
3. Grand Goal
Pig
– This pig helps your child save toward a specific goal,
usually a special toy they really want. Many moms report
that their kids take far better care of the toys they have
bought with their own money than the ones they’ve been
given. What kids buy with allowance gives them a sense of
pride, accomplishment and ownership.
4.
Kind Charity
Pig
–
This account helps instill the value of giving to others.
Get your children involved by discussing and visiting
various charities and letting them decide where their
donations go. And when your children are ready to make their
donations, ensure they are the ones who mail or
hand-deliver them—not you.
How much should go toward each pig? Most kids find it easiest to
put 25% in each account. Older children can flex these
guidelines a bit, but a good rule of thumb is to put at least
10% toward charity and another 10% toward savings.
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Parenting Allowance Help: You Bought What?!
What kids buy with allowance will often seem like plain ole’
junk to you. Sometimes your children will want a cheap toy that
you know will break shortly after they purchase it. Or maybe
they want candy that you would rather they didn’t have.
The best thing to do in these situations is to allow your
children the experience without any interference from you. The
natural consequence of having the toy break is a wonderful
learning opportunity. When it comes to candy, whatever junk food
is not allowed at all is what they will want even more. So allow
your children to spend their “play dough” money as they wish.
This is a form of respect and can teach your children how to
spend wisely.
In
the end, what kids buy with allowance is more than material
goods. As you implement an allowance system and stick to it, you
will be teaching your children valuable lessons—lessons about
how to spend, how to save, and how to do both wisely.
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Kelly Nault, MA award winning parenting author of When You’re
About To Go Off The Deep End, Don’t Take Your Kids With You
inspires moms to put themselves first—for the sake of their
children. She shares time-tested tools that motivate children to
want to be well behaved, responsible and happy! Sign up for her
free online parenting course here.
You are
free
to print or publish this article provided the article and bio
remain as written and include a link to
www.mommymoments.com
as shown above.
© 2005-06 Ultimate Parenting.
All rights reserved. |
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