I wrote this article about kids’ allowances a long while ago, but I still use these accounts with my daughters. They are a way of channelling money to them without buying cheques or paying transfer fees.
For the longest time, my wife and I tried to get the kids on an allowance. We thought they could learn what money is, how it works, and some responsibility. Inevitably, we’d forget for a couple of weeks, try to catch up and eventually just gave up. This upset the kids a great deal. Interestingly, we were trying to teach the kids responsibility, and all it did was show how irresponsible their parents were.
About six years ago, I was in the TD on one of my yearly visits, getting my bank fees waived for a year and getting them to fix something they had screwed up (I think it was my mortgage that year) when I asked about kids’ bank accounts. My brother sends the girls money every year, and we had got to the point where we didn’t want to buy them toys with it. The poor woman whose life I was ruined for the day said the accounts could be opened then (since the kids had SIN numbers), and the accounts would show up “under” my account on my online banking.
A day or two later, a light went on in my head. I called the bank representative (who I now call once a year because I do most of my banking online but couldn’t figure out how to do what I wanted). I asked her to set up weekly transfers from my account to my kids’ accounts, thus assuring that the money was paid every week (whether I remembered or not).
Did it Work ?
Well, it has worked, the kids get their weekly allowances, AND they do things like:
- Buy clothes that they really want
- Have somewhere to put their uncle’s money and can then buy what they want
- Buy presents for their friends birthdays (that one shocked me the first time it happened).
So it seems this experiment has worked, chalk one up for me
Did this teach the kids the value of money? Not sure, but my kids (3 of them) all seem to have their lifestyle ideas about money.