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So in an article from May 2005, I described how I allocate my 3 daughters their weekly allowances.

The simple explanation is that I took advantage of the free transfers between accounts that I had signing authority to transfer the money directly to their accounts. At the time, this was new and exciting. This can be done now using Interac transfers, so your kids don’t even need to be at the same bank.

What I have learned now from running this experiment for over an extended period:

Advantages:

  1. I don’t forget to give them their allowances, which was the major problem I had.
  2. The girls learn how direct withdrawal works
  3. Some fiscal concepts like saving become obvious, which is good. I can also transfer baby sitting payments to my oldest, easily as well.
  4. They are using their money to buy things like gifts for friends and their own clothes, which was not the plan, but I applaud every time they do it.

Disadvantages

  1. Kids don’t see the money, so forget that they have it.
  2. They have not picked up the “checking your monthly balance statements” the way I hoped, they rely on me telling them how much money they have.
  3. Money seems to be invisible to at least one of the children.
  4. The cafeteria at the high school takes direct withdrawal, so they use their allowances to buy lunch a little too often (IMHO).

All in all, I think the experiment is working. I need to sit down with the girls and discuss a few of the finer points I’d like to see, but I think it is working.

I am now searching for any other interesting experiments like this to teach my kids more about money. No, I am not giving them access to their RESPs. That is not going to happen until they need it!

Addendum Allowances

I have restarted this with my son. I am not sure how it will work with him, but the methodology is still sound. He still is working on what money really means, but he is slowly learning.

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Redux: Real World Example: Kids Allowances

Back in 2005 just when I was starting to blog, I never really knew what I was going to write about. So I wrote about the system I put in place to make sure that my kids got their allowances.

Real World Example: Kids Allowances

The 10 Bob Note When I was Young That Would Have Been a great Allowance
The 10 Bob Note When I was Young That Would Have Been a great Allowance

My wife and I wanted to get the kids on an allowance, so that they could learn about money. Inevitably, we’d forget to pay 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). That is 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.

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Lifestyles with Boomerang Children

I wrote this commentary on boomerang children back in 2013 at the height of my kids coming and going from my house (for University). Before they move back in, maybe lay down some ground rules first?

The concept of the Boomerang Children or KIPPERS can be viewed in two ways:

  • Kids that move out initially, however, due to any of 100 reasons move back in with you.
  • While kids are at University they go away for 8 months (you get used to a certain lifestyle) and then they return and muck it all up.

In the first case, the kids move back in and you create a different lifestyle while they live with you (my suggestion would be to make sure that they give to the home, don’t just let them live with you “gratis” (unless you want them to never move out)).

Lew Zealand famous for His Boomerang Fish (not his Boomerang Kids).

The second instance is an issue we have run into the past few years. Here are a few of the interesting issues that arise when kids “come home” from being away at school:

  • They stay “at home” for the summer, however, they don’t manage to sublet their apartments at school, so you end up paying rent on an empty place. This one makes you wonder if the high price you pay for residence might not be bad, given you only pay fees while your kids are living there. My kids have been good at helping pay for this as well (or getting sub-letters).
  • Blossoming food costs, thanks to more mouths to feed around the house. Kids come home and wonder why there is no food around the house? Here is a hint, you are eating it all!!!
  • Vehicles suddenly disappear, or there is an assumption that cars are available all the time. You know which car you can have access to when you want? Your own damn car (so go out and buy one, or stop grousing about cars not being available).

The main issue however that my wife and I have found is the cost of utilities suddenly exploding. Our electric bill goes up a little, our water bill goes up a fair amount (when did a normal shower last 45 minutes long?), but the Internet costs are what really drive me insane.

It seems young folk believe that Internet is free, and unfortunately with my current service provider, their overage fees are astronomical. Both my kids seem to have access to other folks’ NetFlix accounts and download a great deal of stuff, and two years ago I actually had $120 of overage fees from Rogers one month. I did call Rogers and got that lowered, and also got a cheaper rate (after complaining about the overage charge), but even when my kids visit for a week, that month we almost overrun our Internet Cap.

Possible Solutions ?

The easiest solutions from what I can tell are:

  1. Change the locks and don’t let anyone move back into my house, but that does seem a little bit harsh
  2. Make kids pay for the overages (which will be happening this summer, if they occur)
  3. Find a better service provider that does not gouge their customers like TekSavvy or use Bell Fibe and pay the extra $10 which is allegedly unlimited.

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Taxes: When Should They Start?

Mrs. C8j came up with this one, an interesting question too (actually a group of questions):

  • When should you start filing tax returns for your kids?
  • When should the kids start doing their own darn taxes?

For us, we started filing tax returns for our kids as soon as they started earning money.  They already had their own SIN numbers, so submitting it was not an issue.

The question that arises now is when do I hand over to them their tax files and say, “Go Be Free!” ?

I must admit that doing their taxes while they are at University was an advantage for me, since it was much easier to then transfer their tuition credits to my own tax return, however, eventually they are going to have to figure out how to do it themselves (I suppose).  It’s funny that schools never really offer courses on doing your own taxes, not even seminars or the like.

I think Universities and Colleges would do well to teach this, since even with software (I learned on those darn long forms, with pencil and pen) it can get intricate quite quickly (especially if you are carrying tuition credits from University and even more Loan Repayments for school as well).

When is the best age to get kids to do their own taxes, or should the parents just keep doing them until the child asks to do it?

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Empty Nest, Really?!?

Back in 2012 I was lamenting and wondering about having an Empty Nest. Money obligations and expenses continue on, whether your nest is empty or not. The best you can do, is make sure your financial nest is clear of debt. Whether your house is ever empty, then will not be as big an issue.

Yesterday I dropped off the last of my children at school, and now our nest is empty (sort of, my 7-year-old son is still at home, as are our two cats), so me and Mrs. C8j are now living a relatively empty nest life (or at least a single child family).

What does this mean? Will we become Helicopter (or worse a Blackhawk) parents? We seem to have the time to do this, but given my son is on the Autism spectrum, we will be closely involved with his education, but again, that may not really count. Will we be foot loose and take up new lifestyle ideas ? Nah, not me any how, although I might get a bigger TV (80″ does sound pretty sweet for the football season).

Do we now have much more disposable income? Ay, there’s the rub, I have an empty nest, however money obligations continue to live on don’t they? University education costs continue to dog us, schooling costs in general, repairs on our house must be done, so when do you finally get some “me money time”? I have no bloody idea.

I have had a few younger co-workers say something about how they envy me, being close to retirement and such, however, I usually beg to differ with them, pointing out that throughout my life my disposable (or discretionary) income has shrunk throughout my life. The time I had the most “me money” was when I was in High School and University. As soon as I graduated my “throw around” money started to shrink and it continues to shrink.

Maybe one day I will suddenly realize that I am “foot loose and fancy free” financially, but I honestly cannot see that day any time in the near future (unless it rains money, or I start making a bloody fortune on this blog (OK, that is always funny when I write that)).

Question: When do you think you will be financially comfortable and your money is your own?

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