By JLP | December 23, 2008
I’ve written in the past about how my wife and I handle our kids’ allowances. Basically, we pay our boys $10 per week. That allowance means that my wife and I are not hassled for stuff every time we go to a store. If they want to buy something extra, they have to use their allowance money.
The problem is that we live in a cashless society. Everything my wife and I have is automatically deposited into our checking and savings account. We rarely have cash unless I make a special trip to the ATM to make a withdrawal or remember to get cash back at the grocery store. The problem with this is that I rarely have the necessary change to pay the correct allowance.
I have been rethinking how we pay allowance.
I called our bank and found out that we can get our boys check cards that we can load up for them. The banker told me that he didn’t think they had fees but I’ll have to find out for sure. I have an appointment with him today. I’ll let you know what I find out. They also have a teen checking account that looks interesting. Only one of our boys would qualify for this type of account.
I’m a little nervous letting our boys have a check card but they have to learn to handle money some way and since their account would rarely have more than one month’s worth of allowance, I don’t see downside other than overdraft fees. I’ll have to find out more from our bank.
I can see this as an excellent learning opportunity for our kids. I can also see this leading to more responsibility in the future as my wife and I give them a clothing budget and make them responsible for clothing purchases (hey, they gotta learn sometime!).
I do want to make one thing clear: my wife and I will still be very involved in their financial decision-making. In other words, our boys won’t have free-reign.
UPDATE: I just got back from the bank. I signed our boys up for “Youth Cash Card Accounts.” The accounts are in the boys’ names with my wife and I as co-owners. There’s no charge to have the cards unless the boys overdraft. I doubt that will happen. If it does happen, the boys will be responsible to pay it back AND they will lose their card privileges. It’s my goal to show them how to keep track of their spending so that they never get to the point where they are overdrawn.
The accounts are separate from our checking account but linked so that I can transfer money into the account for them—something I plan on doing once a month. The boys have no online access so they can’t logon and move money around or anything like that. They will have to rely on me or my wife to look up their balance. I will show them how to keep a register so that they won’t have to ask us how much money they have.
The only thing I’ll have to work around is how the boys pay their tithe. These aren’t checking accounts so they won’t be able to write a check to pay their tithes. I’ll figure something out.
The downside to this is that their cards could get stolen. But, I don’t see them taking their cards anywhere without at least my wife or me being with them.