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 (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?

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

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). I am constantly amazed 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.

{ 6 comments }

Why Don’t They Empty the Dishwasher?

And other questions about Teenagers

One of my pastimes is as an assistant coach on a girls’ basketball team, and a few weeks ago the head coach asked me a very good question, “Why aren’t they running the offense?“, which is a question we ask each other a great deal, but I had a momentary epiphany which I like a great deal (still).

Why don’t they empty the dishwasher, even though we tell them to do it every day? Why when they finish emptying the dishwasher don’t they put dirty dishes into the dishwasher?

It really does sum up the problems we have with the young ladies apparently not listening to us, they just don’t seem to remember things that we think are very important. My opinion is that they think these are “requests”,  they simply don’t listen or they don’t think the tasks are very important, but that is not really the point of this post.

We keep thinking the girls are making “mistakes”, but I don’t think that really is the case, it is just they simply don’t think of it at the time (i.e. a sin of omission not a sin of misinterpretation or mistaken action). We will keep working with the young ladies (although the season is coming to a close very soon), maybe they will have an epiphany of their own.

Sh*te Vortex

I have surmised this is what happens to a lot of folks when they start creating the Shite Vortex that is their financial situation, they are not trying to create it, but by forgetting the simple rules that Financial Bloggers spew (sorry a long weekend of dealing with bodily fluids) daily, they create the problem.

This doesn’t excuse either our players or the folks who create Financial Shite Vortexes, it just allows me to understand the thinking processes a bit more (I empathize, but I don’t sympathize). Understanding why mistakes are made, gives me hope that the “mistakes” can be averted the next time.

Why do you think folks do those weird things, that they know are wrong, but do them any how? Do you have a dishwasher that never gets emptied?

{ 1 comment }

Fathers and Money

Unfortunately, my Dad passed away not too long after I wrote this post, but I am glad I wrote it, just to help me remember what he did for me.

My Father turns 8 decades plus one year old, and as usual I almost forgot his birthday. It’s interesting that Fathers always make sure that kids send their Mothers cards and such, but Fathers kind of get lost in the hustle and bustle of daily life. In the days of Long Distance being a big money-maker for phone companies, it used to be that Father’s Day was the day the most collect phone calls were made, but I digress.

What do our Fathers teach us about money (those of us lucky to have Fathers)? That depends on how your Father chooses to teach you things in life. A lot of Today’s Fathers tend to be very hands on and will tend to tell kids about life lessons in general and money in specific, in a very direct manner, which I think has it’s merits. Many times we need to be told about the perils of money directly, because you just might not know what problems you might be creating by a bad decision on your part.

In my case my Father rarely directly said much to me about money, he preferred to teach by example, where he worked hard, and made sure all the bills were paid and we had what we needed to live on. He did on occasion intervene but not directly, usually by asking leading indirect questions or telling stories (remember the The Parable of the Singing Horses), but he rarely intervened directly.

I can’t really say which is the better way for Fathers to advise their kids about money, I think my Father’s ways worked OK, I think I would have liked some more direct advice from him, but then again, would I have taken the advice? Some things are best learned in the school of hard knocks as well.

What have I learned from my Dad?

  • Hard work is rewarded, eventually. He worked hard every day, and sometimes he got the short end of the stick but mostly he reaped the rewards from his hard work.
  • Panic is a luxury that you cannot afford, no matter what. My guess is my Father did have some anxious days in his life financially (in the beginning), but I never knew about it. Do my kids need to know when there are financial issues? I don’t think so, unless it may affect their lives directly, then they need to know.
  • Pay cash for everything, I rarely saw my Dad use a credit card, but I am also paranoid about walking around with large amounts of cash, so that one is a little harder to live up to.
  • Education is power, there was never any discussion about whether I would go to a post secondary institution, most of the discussion was on what I might study. He commented directly here stating, “… there is no bloody way I worked my ass off to get off a farm, to have my son go back to one!”, when I mentioned Guelph Agro-Engineering program.

What did your Father teach you about money?

What did I get my Father for his birthday? Sh*T My Dad Says, it’s not meant as a commentary on his advice to me, it’s just a funny book.

‘Why the f**k would I want to live to 100? I’m 73 and shit’s starting to get boring. By the way, there’s no money left when I go, just fyi.’ – From the book

{ 4 comments }

Taboo Subjects With Kids

Larry MacDonald asked me a few questions for an article he is working on, and it caused me to think a bit more about a subject that it is important as parents to talk to our kids about. What are the taboo subjects with kids in most families? I must say that as a child growing up my parents never brought this subject up, and I must also admit that most of what I learned about it initially I learned “on the street”.

What is this taboo subject, that so few of us talk to our kids about (and heaven forbid ever want to educate them about)? Debt is the new taboo subject, not sex. My parents did talk about Money, but mostly in platitudes about the importance of saving and knowing how much money you earn and working hard (the Anglo-Catholic work ethic).

The subject of DEBT was taboo, and I suspect it is in many houses, because parents feel squeamish talking to their kids about this important topic. Admitting to your kids that you carry debt seems almost to be like talking about whether you did drugs as a kid, or when you lost your virginity (nope haven’t talked about either subject with my kids either).

As a youngster the first time I heard about DEBT and borrowing was from a school chum, who said his Dad had got some money from HFC (Household Finance) and at the end of the month he had to pay back MORE money than what he had been loaned. This concept seemed completely foreign and weird to me, and I believe I may have brought the subject up with my parents, and they may have dismissed it with a, “Well, never deal with a company like that….”.

There was an opportunity to teach a young mind about debt, and borrowing, but an opportunity missed in this instance.

You don’t have to go into gross details about your debt to your kids, but explaining to them what debt you have, and better still WHY you have that debt may be an important lesson to teach your children.

An example would be explaining about your Mortgage and why you carry that debt. Kids think you own your house (I know I did) and I didn’t really figure out that my parents didn’t own the house until I was graduating high school and there was talk of Mortgage burning parties and such. Having kids understand what a mortgage is for (and maybe what it is NOT for as well), helps them understand what Debt is, and the more they understand Debt, the less likely they are to get themselves into a “Debt Jam”.

Too many kids I know have no idea what debt is, or worse, don’t seem to care how it can disrupt, strain or even destroy lives and relationships. If your kid grows up with the following cause and effect model:

I ask Mum and Dad for an Iphone -> They argue about it, say that it is too
expensive -> I keep asking and finally they buy it for me -> They get mad
at me when I lose it or use it

what are these kids learning? Did you have to go into debt to buy this toy? Can you afford to pay for this toy? Does your kid value this toy? (I believe in this example the answers are: Nothing, Yes, No, and No).

Teach Your Children Well

Teach your kids about Debt (aka the 800 pound Rhinoceros in the room) and encourage them to learn about it themselves. Don’t let them learn about it on the streets!

{ 2 comments }

Money Games

I remember as a kid I loved to play games, especially with friends and family and I enjoyed hours of fun playing those games. Some of these games actually were useful in teaching me about Money and it’s use, not just about the joy of competition (and winning).

The money games I played when I was a kid were:

  • Monopoly, which is an obviously good money game, in the sense that it teaches kids about ownership, money management and about some monetary concepts like Mortgages, Taxes and Going bankrupt (not too sure what Free Parking taught you, but you did learn that it was good to stay out of jail as well).
  • Careers was another game that I enjoyed, because it taught you about working or at least introduced the concepts around building a career and what you might need to do to build that career.
  • Life, was a great game for day to day family life teachings, where you simply lived a life and had to pay out a lot of money along the way and attempt to get rich by the end of it all (and stay out of the poor house).

The best money game when I was a kid was called Pay Day, which was actually quite simple, but very effective in teaching you about balancing budgets, paying bills and living within your means. When I started playing this game I had no idea what some of the concepts being taught were, but when I got older more and more of those concepts showed up in my day to day life and I am sure I said to my wife more than once, “This is just like playing Pay Day”.

Not sure what today’s kids do to learn about money, although I guess games like SIMS and such do have a monetary concept to them (as does Roller Coaster Tycoon, a game I enjoy playing still).

Did you have a favorite money game when you were a kid?

{ 2 comments }

%d bloggers like this: