Last weekend my eldest daughter opened a lemonade stand for the afternoon and totally raked in the dough.
She and her (totally adorable) friend made a whopping $24 in a half-hour and she was thrilled to stash the loot in her piggy bank. The thing is, she has absolutely no sense of the value of a dollar. We have not yet instituted an allowance, and she has never really bought anything for herself. When we’re out and about running errands at stores, I try to explain to her how it’s fun to look at things but it’s not good to buy stuff that we don’t need. She knows that I like it when things are “on sale” and she is generally understanding when I explain that some things are too expensive or that we don’t have money for them right now.
But. I wonder when she will be ready to start managing her own money (in small amounts, of course). I think it’s so important, but I don’t really know how to approach it.
Do you give your kids an allowance? At what age did you start? Do you let them have free reign with their purchase choices or do you refuse to let them buy a four-pound bucket of gummi bears with their cash?
My daughter has an allowance, and she has a bank account, but her grasp of the concept of money is pretty weak. She’s five. I give her 50¢ a week for putting her laundry away, she puts her money in her piggy bank. And when her pig gets full, we take it to the bank together so she can count it and deposit it. And when we get a bank statement I show her how much interest she’s earned. We do the same thing with money she has been given as gifts.
When she asks for a new toy, I tell her she can save up her allowance or she can add it to her Christmas list and hope that Santa brings it for her. I haven’t given her “take the money out of your bank account” as an option, and I won’t for a very long time. My hope is that we’re laying such a firm foundation for saving, that she will continue to save for the rest of her life.
In terms of giving, we focus on in-kind donations and volunteer work. My kids come with me to my volunteer ESL sessions, and they help choose items from their rooms to donate to the women’s shelter, the teen mother’s facility, and goodwill. For us, money is political – every dollar spent is a vote in favour of that good or service. I’m hopeful that my kids will understand the value of action, too.
Experiencing giving is critical too, even more so than giving money. We don’t do “gifts”. Our kids already have so much! Christmas is about time together and maybe we plan a trip or some experience together. And my kids both do Giving Birthday parties where people are urged not to bring gifts but if they would like they can bring some money to donate to a charity of the child’s choice. The child will then buy 1 gift of their choosing and the rest goes to the charity. But, even more than this, my older child has gone to the food bank and has been involved in “adopting” a family over the holidays. He has cleaned up parks in other neighbourhoods and served food to the poor. When they get a chance to see how others struggle it is much more powerful. Now he is aware and understands where his money goes.
We have not had a lot of luck with allowance. You miss a few weeks and suddenly you are doling out a lot of money. We give money as needed within limits. They can do more to earn more if they want to do something special but usually it is about choices.
As for gifted money, it is in savings. Sometimes they talk about something they might want to spend some of their money on but they have never touched it. We would have to have a conversation about choices should they ever want to use some of it.
My 2 cents!
Ah Kindra…that is awesome! What a beautiful thing to do. There is a piggy bank that you can get that has the whole giving, saving and spending and I’m absolutely doing that – so important. Amanda my son is fixated on having a lemonade stand for some reason! I looooove that picture of hte girls!
I had my first taste of my 4 year old getting her hands on some money when she graduated preschool in the Spring. Her eyes got wide with visions of candy, ice cream and toys and I got a little scared 🙂 I was AMAZED when she donated $4 of her entire $5 to raise money for children in the slums of India to receive milk at their slum school. Yep pretty much cried when she happily took her 4 loonies and dropped them in the bucket at church. She lead the way for me, and it showed me how important it is to teach my kids to be generous and giving.
I love Gail Vaz-Oxalade and what she has to say about teaching people how to deal with their money and I discovered she has some stuff on teaching kids too: http://www.gailvazoxlade.com/articles.html I think when my daughter is a bit older we will teach her both Giving, Saving and Spending.
Tooth fairy land is where we find ourselves. No allowance but tooth fairy cash and he has figured out that returning bottles makes money. So… we are sharing the value of things he wants and he can save up for toys that he wants and we think are reasonable. Maybe we are mean but it has been a fun lesson, so far!