A guide to helping coach your kids through spending choices, and ideas on how to develop systems where your child is responsible for their purchases. Plus, Anne will walk-through conversations to have with your kids at the store. (If you are interested in the optional Kids Activity, see previous episode #47B.)
Short and Sweet Parenting Tips here with Part 2 on allowances. This week we’re talking about natural ways to teach your kids about spending, and an approach that encourages saving without lectures or multiple piggy banks. If you missed Part 1, we not only talked about allowances, but other sources of income like chores, grades, and gift money. Establishing an allowance (which we covered previously) and managing your kids’ spending (which we’re talking about today) are very closely related, so we’ll recap at the end to tie everything together.
Giving our kids an allowance is a natural way to put spending in our children’s hands. Using their own money to buy things benefits kids because it can empower them to make spending choices, which improves responsibility and self-esteem. And, we as parents can use the allowance as a teaching tool to encourage responsible spending and saving. Establishing this system will also pay dividends (seriously, no-pun intended) in the future when your young adult is successfully managing their own money.
Something we thoroughly discussed last week in Part 1, is acknowledging the challenge for very young children to understand how much things are worth or what money represents. So, in the beginning, specifying an amount of money for an allowance might be beside the point. If you have a little one and didn’t get to listen to Part 1 on Income, you may want to go take a listen.
Regardless of the age of your kiddo now, or how you plan to implement their first allowance, start out by introducing the concept of ‘your child having their own spending money’. This mini-lesson could even take place before you start giving junior an official allowance. Just tailor the conversation to your kids’ age and maturity. Like, you don’t have to give your kids Economy 101, unless of course you feel it’s appropriate. It’s enough to show them some paper money, take them to a store, and point out what that amount of money would buy. For example, show them that they can get two bouncy balls for a couple of dollars, or one slinky. You can even mention that if your child wanted a doll or toy car, they may have to save up more money over time in order to afford that. And, BAM, you’ve just had your first conversation about spending choices!
Just a note: I gave some suggested allowance amounts in last week’s episode, but I encourage you to dig a little for recommendations that might fit your family and your kids’ needs. Right around kindergarten is a good time to specify an amount for a weekly allowance. This is where you can add in other little lessons like ‘small things can be more expensive’, and ‘store brands often cost less’. And since your child is older, when they find something they can’t afford with only one allowance, you can more thoroughly discuss how to save up and explain how many weeks/allowances it might take. I do have a trick to help kids afford bigger purchases, such as video games or American Girl Dolls, I wish I could cover it in this episode, because it’s HUGE, but we just don’t have time, if we want to stay short and sweet. Please come back next week, where I will cover our go-to system that enables your kids to afford larger items.
When it comes to finally buying something with their allowance amount, we suggest letting them pay for the item in person with real cash. At least at first. Now-a-days, I’m usually the National Bank of Mom for my kids. I don’t carry their cash around, but instead I track it in a notebook app on my phone. I say that, but they have to do the math with how much say, ‘three allowances are’…Or if they spent $9.95, how much is left…I usually round the numbers and tell my kids, if they want to do exact math to the penny, they can go for it, and then let me know how much they have. That’s when they agree that rounding the amounts is ok after all…
Anticipate that there will come a time when you are shopping and your kid wants to buy something, but is completely out of allowance. You can say something like, “I’m sorry, sweetie, you are out of allowance for the week. We can come back next week, when you get your new allowance. Remember what you wanted to buy, and we’ll come back for it when you have your money.” Be as matter-of-fact about it as possible, and not to entertain negotiations. Otherwise, you may undermine your training – I mean your kids’ training.
Some kiddos may like to carry their own money. Others would prefer their parents keep it in their wallet, which is probably safer for younger children, so they don’t misplace it. There was a time when our elementary-age kid wanted to carry her own allowance. I would remind her to bring it to the store when we left home. Often she forgot, sometimes she just chose not to bring it. So when she wanted to buy something, I’d say, “Did you bring your money sweetie?” (Even though I already knew the answer, I did this to walk her through the thought process. This also kept me from being the bad guy.) When she said she didn’t have it, I’d say, “Oops! I’m sorry. Let’s remember to bring it next time” If this happens with your kid, give them sympathy! No, “I told you to bring your money”. We don’t want to cheat the natural consequence, and risk creating ill feelings toward the whole allowance situation. Remembering to bring their money to the store is part of the responsibility lesson.
At the beginning of our family’s allowance journey more than 10 years ago, we really just wanted to minimize begging at the store. We had no idea of the benefits that being responsible for their own money would have on our girls. Over time, we’ve noticed how much our kiddos thrive on being self-sufficient with their money. It’s so empowering to them, and has increased their sense of responsibility, not just with money, but in how they take care of their things. Having to do extra chores to supplement their money has also given them an impressive work ethic. BONUS: not depending on us for their purchases helps keep that dreaded “entitlement mindset” to a dull roar.
That finishes this 2-part overview on allowances. I know I promised a quick summary before we wrap up. So, here’s a little re-cap of Part 1 on establishing an allowance: you want to introduce the concept of kids having their own spending money, decide on the dollar amount you will start out with, and whether or not the allowance will be linked to chores. You can also decide whether or not you’ll pay them for doing extra jobs around the house, or offer them grade money. Here in part 2, we discussed the spending side of allowances, helping your kids understand spending choices, and developing systems where they are responsible for their purchases. Next week, I’ll share a no-nonsense way to reward your kiddos when they choose to save up for a particular item. I can’t wait to tell you about this system, and I really wish I had had time to cover it here. So, please come back next week!
This series will wrap up Season 1. The focus of Season 2 will be to dive deep into issues that are really challenging including mental health awareness, gender identity, race and cultural differences, and overindulgence, just to name a few. The purpose of Season 2 is to coach parents on how to navigate these tough topics facing our kiddos. If you would like a particular subject covered, please post it or PM me through the Short and Sweet Tips Facebook Page. You can even message me through shortandsweettips.com.
This was Short and Sweet Parenting Tips. Fresh ideas in bite-sized portions.