Well into our allowance experiment Bret and I have learned something about our daughter. She absolutely can not spend money fast enough. Now that she has a budgeted line item for many different types of spending, she feels it necessary to spend exactly that much as soon as she gets it.
Yesterday she was off from school and was desperate for a trip to Target. She had carefully perused the Sunday sale ads and found shorts she liked for $10. I agreed to take her, but first we talked a little bit about her purchase. It turned out, she didn’t really need shorts right now (who would have guessed?) since it was cold and rainy and likely would be for another month, but she actually did “need” long sleeved shirts and pants. Since we found that most of the stores had transitioned over to spring clothes, she asked if she could go to the local kids consignment store. We got there and she was in heaven. She shopped and shopped and felt so rich when we finished our shopping day with two full bags of clothes. The best part was when she said to me on the way home, “Wow, I would have only gotten four pairs of shorts at Target, and I got two whole bags at the other store!”
I felt a big sigh of relief. Maybe she was understanding after all…
We’ve been “doing” allowances for quite some time in our house. We’ve tried a variety of different methods with varying degrees of success. Our kids are pretty well used to the fact that if they want something, they need to have their own money to buy it. Up until this point, however, if they needed something, we were usually right there to step in and help out.
As our kids have gotten older, their language and actions made us realize that they were ready for more responsibilty with their money, so in January, my husband and I launched a new program in our home. The two of us spent a few weeks tracking where our kids spent money and how much they spent. We then thought about all of the areas of their lives that we felt they could control their own spending and set up a budget for each of them based on this analysis.
Some of the areas we decided they could control: clothes, shoes, activity fees, lunch money and fun money. Now some of these may seem harsh, but in reality, we are actually giving them the money they need to pay for all of these things, but they are having to make choices about how that money is allocated. For example; I really encourage them to take a lunch to school each day. From both a nutritional and financial standpoint, I feel home lunches are just a better option. So my husband and I told the kids that we will pay for any food out of our kitchen. They need to pay for school lunch if they want it. In reality, in their food budget they have more than enough to pay for school lunches several days a week. Now, however, they often choose to save that food money for treats at the movies or a special cereal or to transfer the money into another “account” where they need more funds.
This has been an eye opening experience for us… stay tuned for updates and for ideas on what we’ve found works (and doesn’t work) when teaching your kids about financial independence.