That’s the question Steve Rosen of the Kansas City Star asks in his column Plastic, Not Fantastic. I have to agree with Steve that it is more important to teach your kids proper money management skills with actual money BEFORE we train them in the proper use of plastic. The reason I say this is that I know from experience that kids need to feel the pain of making a purchase.
My wife and I have paid our boys a weekly allowance for a couple of years now. Although I “paid” them weekly, I used to just keep a running total of what they had available and then when we were out and about, if the boys wanted something I would buy it for them and take the money out of their account. The problem with this is that they weren’t getting the experience of spending their money. Their money wasn’t real to them because they never really saw it. This year we are doing things differently.
Now, we pay them a weekly allowance divided the following way:
10% – Tithe
25% – Long-term savings
25% – Short-term savings
40% – Spendable
They are responsible for keeping track of their spendable money. If they want to save their spendable money and add it to their short-term savings to buy something like a skateboard, that is their choice. Also, if we are out and about and they see something that they want, they have to have their money with them. If they don’t they don’t get to buy whatever it is that they want.
My goal as a parent is to teach them responsibility. I’m sure they will make mistakes, but I also think that by them taking more responsibility while they are still young, they will have a healthy respect for money when they get older.
Now it is time for your comments. What are you doing that works? What are you doing that doesn’t work? Let’s get some dialogue going.