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.


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).
Looking for your next great read?

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.


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?


Teaching Kids About Money

I tripped across this very interesting report from our friends at PBS Newshour (seems to be the de facto news source these days) about Sesame Street and it’s new program to teach kids about money, but it is about other things as well, which is worth watching.

Lots of interesting comments on the American populous and their ability to understand money and saving.

As part of his continuing coverage of Making Sen$e of financial news, business correspondent Paul Solman reports on how “Sesame Street” friends Elmo, Grover and Cookie Monster are teaching children smart ways to save and spend money — and how many adults could use a refresher on the basics of saving for the future.

Grover and the Marshmallow Test

I love the interview with Grover about where he learns about money, and he learns about the Marshmellow Test too. This is teaching kids about money .


“Don’t Mistake Activity for Achievement”

This quote (Don’t mistake activity for achievement ) from John Wooden is something I remind my co-workers about often, and it is something to keep in mind when doing financial planning as well. John Wooden was the dean of College Basketball coaches in the U.S. but his simple theories on life live on in so many ways.

Simply because you are monitoring your spending and religiously using Quicken does not mean you are actually Achieving anything (other than time spent looking at numbers). Grouping together a set of activities that are similar, is still not assuring any achievement in that area.

If you:

  • Download all financial transactions into Quicken
  • Keep all of your receipts
  • Make sure you know the value of all of your assets (stocks and such)
activity for achievement
The True Wizard of Westwood

All you are achieving is information collection, you must act on this information, or have a plan on how you will react to the information to make any kind of impact on things. Mindlessly doing busy work may seem satisfying, but if you have nothing gained from it, why did you do it in first place? Having a plan or at least spending thresholds that you can act upon will make this data collection steps towards a worthwhile goal, but you must do more than just collect data, you must analyze it as well.

A great example of this was pointed out by a coworker, who mentioned that a “guess how many rice kernels are in a jar” contest had been won by someone, who had guessed 5000, and the actual grain of rice count was 5018. So someone during work counted all 5018 rice kernels? Was that a good use of a worker’s time? I guess in terms of the contest, but not in terms of them doing this during work hours.

If you are not sure why you are doing something menial every day task, ask yourself, what am I achieving doing this?

Collect data, however, use tools to analyze it and then act upon the new information you have learned, and you will be achieving more than simple data collection.

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