“Working to help parents raise money-smart kids.”
Hello, friends!
I just got back from a fun family Thanksgiving in San Francisco, and I’m excited to bring you “3 Ideas to Share & Save” that might help you this holiday season.
So let’s dive in!
— 1 —
Let Children Choose: An intentional allowance will help you hand over decision-making to your kids. And doing so will almost certainly save you many headaches (or even in-store tantrums 😱).
Case in point: I was recently in a bookstore with a friend who was making a purchase for his daughter, as she had discovered a title in which she was really interested.
While we stood in line at the register, his son noticed his sister’s haul and swiftly returned to the stacks. He soon reappeared with a book he’d not even opened and told his dad, “She’s getting a book. It’s only fair that I should get one too.”
My friend could have averted this sticky situation with an allowance, which would have given both his kids the opportunity to weigh their purchases against their interests. His daughter likely would have bought the book she was clearly excited about, and his son probably wouldn’t have spent his money on a book he hadn’t even examined.
Bonus tip: As I’ve mentioned before, my wife and I agreed to a family subsidy when it came to books. We would pay half the cost of any title (doubling our daughters’ purchasing power) because we wanted to encourage reading.
— 2 —
Why wait?: With the New Year approaching, it’s tempting to wait until January to begin an allowance program.
Don’t!
The holiday season is a terrific time to get started with an allowance for a few key reasons.
For instance, you will almost certainly end up in a store with your kids. And they, especially the younger ones, will likely beg you for toys during these excursions.
As my friend’s book debacle in Idea #1 suggests, introducing an allowance will help you delegate the decision-making process.
So you can turn the unproductive — and not to mention irritating — back and forth of “Pleeeeease!” and “No!” into questions for your kids to ponder:
“Do you have the money to buy the My Colorful Unicorn doll?”
“Would you like to save to buy that videogame system you so desperately need?” 😉
My wife and I discovered that once our daughters learned they, not we, were responsible for purchasing decisions, those decisions tended to improve. Will your kids make mistakes? Of course! But they’ll learn from each of those missteps.
And you just might get back a little of your seasonal shopping sanity. 🤪
— 3 —
Intentional and Consistent: My sister, Kelly, started an allowance with her 5-year-old son earlier this year. So far he has successfully saved for two goals, including a LEGO set.
But afterwards, when she told him it was allowance time, he asked her, “Why?” 😂
This reaction is pretty funny but not surprising. Since my nephew is still young, the concept of long-term savings is a bit abstract. So my suggestion for a situation such as this is to emphasize the purpose of the three jars.
As you distribute your child’s allowance, your dialogue might go something like:
“This money is for saving for goals, like your LEGO set.”
“This money is for sharing, like when we give to [your family’s favorite charitable cause].”
“This money is for spending, like if there’s something you really want when we go to [your family’s favorite store].”
Money is not always going to be a priority for our kids, and we probably don’t want it to be. Therefore, you can simply use allowance time to keep a conversation going. That way, you will have created a solid foundation for when money inevitably does become top-of-mind again.
We’re all in this for the long haul. So being intentional about and fairly consistent with an allowance will help your kids learn that just as a paintbrush is a tool they use to create art, money is a tool they use to get or do what they like.
And ICYMI, you might find my essay about knowing your allowance “why” helpful too.
Until next week, enjoy the journey!
John, Chief Mammal
P.S. Please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being.
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