Saving $$$
September 22, 2009
Filed under Parenting & Family Posts
I don’t know about you, folks, but teaching kids to save money has been an important thing to me, and something that I practised from the time they first earned pocket money. It was always an uphill battle, as kids see money and want to spend it (just like I do).
One of the disciplines I instilled in them was to give them a saving target – either an item they wanted to buy or an amount (say $20 for an 8 year old). I also for a while insisted that they save half of their allowance while free to spend the remainder as soon as they wanted (= immediately).
And then I have relatives whose kids own shares by the time they’re 13 or buy their own xboxes in record time because of the saving habits and work ethics they’ve developed.
So what practises do you use in your family when it comes to kids and finances?
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We did the allowance bit as you mention, letting them spend half and save half. Quicken helped to keep track of that for us and periodically, the saved amount would be enough to actually fully deposit into their real bank account. This also helped to foster the idea that money needs to go into the bank in order for it to come out of the ATM.
As they got to college, we made a deal with them to pay half of what the college cost would be. All scholarships and grants would come off their half. This did two things, one split the cost; two, helped to ensure that they maintained their grades to keep the scholarship money coming.
By this time, I think they were already well on their way to good finance practices (they also had good study/work habits) but it was a good re-enforcement of what we had been saying all along.
Bottom line, I think parents should be fair and be consistent!
Some solid ideas in there, Steve, thanks. I particularly like the concrete use of deposit and withdrawal.