Father Sez

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Review of my younger children’s money habits

Wednesday March 5th, 2008 by fathersez

boyandpiggybank.jpgIt’s been 4 months since we started giving the children a weekly allowance.  In November 07, Abang (14) and Nana (13) signed an agreement with their mother that:

a) They would keep weekly accounts of how they spend their allowances,

b) Save at least 10% of their allowances.

So far this exercise is going well. They show me their accounts book each week (the entries are neat and tidy) and I give them the next week’s allowance. The amount they note as having “transferred to piggy bank” is also noted in a separate page, so that it can be compared to their bank books later.

Bank savings accounts have been opened for all three younger children.

I have not explained to them the concept of “paying themselves first”. Though they save the money weekly, currently they are doing so just because I have told them to.

I have reviewed this process and now propose to tweak it as follows:

a) Based on advice from Lynnae in her installment of the free e-book Money Matters for all Ages, I am going to change this weekly allowance to a monthly one. Hence it becomes more like a salary. The kids will learn how to stretch this salary for a month and also learn to budget.

I am setting 1st June 08 as the target date for this.

b) They have to learn that just whining and complaining will not get them any extra money. They have to do additional chores in the house and negotiate additional payments for this. So far only Nana has earned extra money and that, too, only once.

c) They have to pay for their own special expenses like presents for their friends’ birthdays and stuff like that. I have to elaborate on the frugal ways that are available to come up with a present that is memorable and yet very light on their budget.

This Friday, their first term holidays start. It’s only for a week. Now that there is no cable TV in the house, they should have a little more time. I plan to take them out and have a chat with them on :-

- what are salaries and wages,

- how do people spend their salaries

- what happens when expenses is more than income,

- the concept of budgeting, living below our means and paying ourselves first.

d) I’ll ask the youngest girl, if she is ready for a weekly allowance. So far she has not asked for this. She still receives money daily from her mother for school.

Well, I certainly don’t expect my three musketeers to enthusiastically grasp this talk. I’ll have to take them out to a place they’ll enjoy, soften them up a bit and try. At least I get a chance to talk to them at an earlier stage in their lives than their two elder sisters.

I’ll keep you posted.

Note: The picture is from Google Images.

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3 Comments for “Review of my younger children’s money habits”

by Emily
On March 5, 2008
At 9:02 pm

I am scared of the time when I need to teach my kids about money. I know I shouldn’t be, it will be fine. I am mostly afraid they’ll make really bad choices despite what I teach them.

My dad still has an annual talk with my brother and I about finances (I’m 29, he’s 30). We actually had our talk this past Monday. He was so pleased that by 30, we’re both consumer debt free and making wise decisions with our money. But it didn’t come naturally, we both went down the debt road for a while.

Anyway, I guess the best we can do is give a foundation and they can take from it what works for them.

I think your plan is an excellent one and will work very well!

On March 6, 2008
At 10:51 am

Don’t worry, lah, Emily.

You will only be doing the best for your children. And no one can do more than that. After that the kids will have to fly on their own.

I am also just trying my best.

It’s interesting about your father’s talk with you and your brother. Is it a tradition or something like that. This talk should make a great post subject.

[…] am not completely done with what I had planned to do, i.e. to discuss with them on what are salaries and wages, what are salaries and wages, how do people spend their salaries, what happens when expenses are more […]

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