Friday, January 6, 2012

Kids and money

Yesterday I was writing about my spending Other People's Money, while the day before, over at Get Rich Slowly, the post was about rearing kids.  Isn't it true that kids are the ones most likely to spend Other People's Money?  They hardly have any of their own, so they really have little choice.

The main "money" my boys earn and spend in my home is Mommy Dollars.  Mommy dollars are immediate and they get exchanged in large amounts.  The boys earn anywhere between $5 and $65 each day based on chores around the home.  They can easily blow $40 on watching an hour of television, and they'll gladly spend $18 on bedtime snacks.  But those amounts are all funny money (literally.  The $1 bill in Mommy Dollars features a photo of our dog.  I think that's cute/hilarious --  George Dogington).

When it comes to spending real money, though, life is different.  They have a small weekly allowance in real (U.S.) currency.  They can supplement it by saving Mommy Dollars in the "BoMama" (Bank of Mama) and thereby earning interest that goes into their a real savings account at our local credit union.  Spending this money is quite a different thing.

If the boys break, damage, or lose something in our home, they have to purchase a new one -- seeing the money come out of their account sobers them up a bunch, and this strategy has definitely moderated the wildness we used to see around here.  I do require that they keep a certain minimum in their savings account.  When the account dips below $100, discretionary spending stops, and their allowance goes into the account slowly, slowly. slowly over the weeks until they've got their "emergency fund" reestablished.  A little life lesson, here.

The allowance I give them allows me to see what really matters to them, though.  When I take them somewhere and they beg for something I wouldn't buy myself, I ask, "where's your allowance?".  Most toys that they want their parents to buy aren't worth their own hard-earned cash.  When I put a store-brand can of soup in the cart and J-son points to the name-brand cans, I can offer to buy them if he's willing to pay the difference in price.  Usually, no.  He's willing to splurge if the company is paying his travel expenses, but not if the expense is a personal one.  Sounds familiar.

On the other hand, luxuries like vending machine food?  They say Yes, yes, yes.  It's not just about getting the food, it's about pushing the buttons, seeing the lights flash, hearing the food drop.  It's a multi-media sensation, involving all five senses.  The Bank of Mama would never sanction a loan for such a frivolous expense, but the boys can happily splurge and spend their own money there.


  1. I think your ideas on how to teach kids about money are fabulous. I hope to start implementing some of them myself soon. Thanks for sharing!

    One suggestion, if I may, I wanted to pin this post to my Pinterest so I could find it later but you don't have any images on the page I can pin. Creating an image that's pinable (and preferably have some wording on it describing the topic) would allow for pinning and would help drive more blog traffic your direction (if that's a goal of yours).

    Thanks again!

  2. Kimberlie,

    I appreciate the suggestion! I didn't really know anything about Pinterest -- your explanation is very helpful. Thank YOU for sharing!

    - MM

  3. Ah! Pinterest is an amazing way to share ideas and save ideas that you want to refer back to later. You create boards, and them "pin" images to your board. When you click on that board, it takes you back to the original source (typically a blog or consumer website). I have boards for things I want to do with my kiddo (where I would have pinned this post), boards for recipes, ideas for decorating different rooms, gift ideas, fitness inspirations etc.

    I don't blog, but I follow a lot of blogs and many of them have talked about how much Pinterest has increased their blog traffic because once I pin something, my followers can all see it and any of them may be interested in the topic too.

    Anyway, thanks for taking the time to share your ideas and tips!

    Ps- sorry to hear about your dear friend :(


  4. Children should be given allowances in order to understand the value of money. They should be asked to buy their favorite items with their daily allowances. Parents should be little strict. Parents shouldn't give money to their kids just because they want it. Rather, they should ask kids to earn the money by doing daily chores at home. Other than that, parents should teach financial tips to their kids. This way kids will become financially smart.