Back in 2005 just when I was starting to blog, I never really knew what I was going to write about (nothing much has changed), so I wrote about the system I put in place to make sure that my kids got their allowances.
I still do use these accounts to transfer money to my kids, and I have added a few comments of my own to the original article.
Real World Example: Kids Allowances
OK, so back to what this blog is about, real world financial ranting.
I did rant a lot back then didn’t I?
For the longest time my wife and I tried to get the kids on an allowance, so that they could learn what money is, how it works and some responsibility, but inevitably, we’d forget for a couple of weeks, try to catch up and eventually just gave up (much to the kids chagrin). Interesting, we were trying to teach the kids responsibility and all it did was show how irresponsible their parents were (now THAT is ironic). It’s funny as a parent your kids end up teaching you as much as you think you are teaching them.
About 6 years ago I was in the TD on one of my yearly visits, getting my bank fees waived for a year, and get 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 just buy them toys with it. The poor woman whose life I was ruining 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 on-line banking. At the time, that didn’t seem that important, but at the end of it, it really was the most useful part of the exercise, as I could then may transfers to the accounts for free, whereas now I would send it with a $1.50 service fee.
A day or two later, a light went on in my head. I called the bank on the phone woman (who I now call once a year, because I do most of my banking on-line, 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). It is amazing at how my thinking patterns work, I am not a Fast Thinker, but I do have good ideas, eventually.
Well, it has worked, the kids get their weekly allowances AND they actually 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.
In the end, it helped the girls understand money a bit more. We were not that heavy handed in terms of things they needed (we ended up paying for a large number of things, but we also didn’t make their allowances that big either, but I think the experiment worked out quite well.
My kids are still very little to have their own accounts and budget their own allowance. But as early as now, I am already thinking of ways on how to approach them on responsible handling of money.