Expert Advice

    Whose Money Is It, Anyway?

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    1509_ParentalGuidance_1Q:

    My kids, ages eight and ten, get a weekly allowance. My husband believes this money is theirs to do with what they want. I feel like parents should have the final say on how kids spend their money. Here’s our situation: One of the kids wants an expensive video game. I say no, but Dad says it’s his allowance, so he should be allowed to spend it how he wants to. What do you think?

    A:

    Most adults have a very emotional attachment to their money, so it is not likely Dad’s attitude is “let him buy whatever, whenever he wants.” Chances are, what he is trying to convey is, “Let him learn how to have money and manage it himself.” And I couldn’t agree more!

    Whether the issue is money, homework, friends, etc., if there is risk involved, your instinct might be to prevent your child from failing by closely managing the issue. Thankfully, we are beginning to realize this parenting strategy has no long-term benefit for our children; actually, quite the opposite. So, I completely agree with Dad, if the underlying concern is about allowing children freedom with their own money. Even if you feel that your child is making a purchase that is impulsive, it is in the child’s best interest to learn to try, fail, learn from that experience, and try again. Kids do not learn much of anything by being talked at; they are experiential learners. What they experience as disappointing is not likely to be repeated. “I spent all my money on that one video game and it’s already off the cool list” might just sound like an expensive mistake to you, but it has the potential to pivot your child’s spending for life.

    But, is your concern more about the purchase itself? Your value system, not a child’s, takes precedence, but the child needs to know what those values are and what those values look like in their world. Sit with him frequently to chat about what is off limits in your home. Don’t assume he knows what your expectations are. Talk about them. Translate them to your child’s world. “You already know that a violent TV show is off limits, but violence can also live in the music you listen to and the games you play. Even if you can afford anything you want, you don’t get to have anything violent here.” Saying to your child: “You may buy any game you can afford, except ones that have a rating for violence” gives your child the freedom to learn how to manage his money well and within the framework of your value system. If your objections are more about the amount the child is spending, then work with him and choose a spending limit. Collaboration and clear boundaries leave room for try-fail-try again, a winning parenting strategy.

     

    Q:

    What are your feelings about allowance?

    A:

    Money given as allowance quickly becomes the source of power struggles because we end up making it a reward for performing well, such as doing chores. Then we have to take it away when the chores don’t get done. All children should be expected to complete chores, but I want that concept to be  very separate from allowance.

    An allowance should be given to children for the sole purpose of teaching money management. Think of money like a book or a microscope. The money becomes a teaching tool, not another source of reward and punishment. I was fortunate enough to stumble upon a plan that was successful in my house. This plan has a built-in system of natural consequences and rewards. It eliminated any need for nagging while motivating my kids to save. It also allowed me that little bit of control we are all looking for by making their savings account off limits to them until age eighteen (younger in
    some cases).

    First, take your child to a local bank to open a savings account. Once a month, meet with your child individually. His monthly allowance should be three times his age (twice for children 4 to 8). Yes, that means $30 for a 10-year-old. With your help, he will divide this money equally, establishing spending money and savings. Explain the savings money will remain untouched, but he may use his spending money as he wishes. You will hold his savings in an envelope for him until you meet again next month. Discuss and put in writing a list of things this child must now buy for himself: pool concessions; trips to the dollar store; video games. Some will burn through this money quickly; some will hoard it. Let him figure it out by remaining committed to your agreement. No caving in! Meeting monthly enables you to revise what the child is responsible for buying with this money. Encourage, but do not force him to record what he is spending his money on. He will learn soon enough the value in this. Now say: “Next month we will meet again. I will ask you to bring whatever spending money from this month you have left. I will double that and put it in your savings.”

    I’m certain there are many ways to accomplish the education of money management in children, but this plan
    gave us a successful start!

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    Suzanne Hanky
    Suzanne Hanky is a parenting coach and educator with eighteen years of clinical experience. She founded Collaborative Parenting of Richmond in 2012 with two locations. She is the mother of five grown children.