About this time last year, I wrote this post in response to my son asking me why I am so cheap. It got more traffic than nearly anything I've ever posted here! Since that time things have changed in the way both of my sons view money, and I thought I'd share a few of the things we've done here.
Established an allowance. I know allowance can be a touchy subject in parenting. Some families swear by it, other families feel helping out is just what a family member does. While I agree wholeheartedly that being a family member means helping out, I do feel it is important to attach work to money in some form, whether it's per-job or a weekly sum, working for the family or doing odd jobs for a neighbor. That's how the world works, and it's hard for kids to understand the value of a dollar when they have no experience earning it. To be fair, the husband and I have always given ourselves a cash allowance too, so that we do have a source of no questions asked funds for lunches or little things we want.
Allowed them to spend the money they earned. Even when I hated that they wanted to buy gum or football cards or more darts for their NERF guns. They have to gain an understanding of the cost of an item as it relates to their earnings. Is the $5 box of football cards worth a week's allowance? I do insist that they save half, and I encourage them to give money to charitable causes from time to time.
Talked honestly about our financial situation. We're in pretty good shape, but we've made a better effort this year to find teachable moments to demonstrate practical examples of how we save money and what we are saving the money for. We tell them what we pay for things, such as a season of baseball or soccer, the price of the uniforms and equipment, or the weekly fee for the music teacher, and put that in context with other household expenses. The most important part here is to communicate the information without any weird guilt trips. We also frame things in the long term: that we want to have the house paid for before they graduate, that we need money for our elder age, and that we put money by to help them with college. We also have family wishes, such as a trip to Austria to meet family, and a trip out west to see the Rockies and the Grand Canyon and such. They feel good being a part of the family goals.
Took moments to explain our values. When a kid asks why does so-and-so live in a "mansion" and we have this "little" 2000 square foot house, we explain, patiently, that to most of the world we are living in a mansion. We also explain that so-and-so makes probably makes more money and different decisions with their money. We talk about the greater cost of goods, such as sweatshops in other countries or plastic junk toys that will live in landfills for hundreds of years. We talk a lot about the importance of quality, useful goods, and how that doesn't always mean a higher price. You can get things used, for example, that are just as good. We care for our things and make them last, no matter how we got them, and we try to avoid waste. We bless others with the things we no longer need. And we talk about the importance of helping the needy. I am happy to forgo the little things so I can give a little to help someone else out.
Encouraged them to prioritize for themselves. This one is hard. It requires letting our own judgements go a little bit. We've created a family list of needed and wanted things. On this spreadsheet my husband made, we listed the items, we price them, classified them as needs or a wants, then filled in the source of funds. We discussed each of the items as a group, and talked about whether we felt it should be paid for out of family funds or our own allowance, or could use a gift card from Christmas. We also had to prioritize things in order of how badly we needed or wanted the items. It was a good use of our time, and really made the boys feel empowered.
Taught the boys how to comparison shop. This really got going last fall when the older son wanted to buy an iPod with his own saved money. He saved up enough for the iPod between allowance and a couple of gift cards, made sure that he still had an equal amount to save, then spent an afternoon with me on the computer comparing the prices. When it was his own money on the line, he really woke up to the fact that nothing has an inherent monetary value, that is all about what the merchant is charging, and what you are willing to pay. We ended up finding a good deal where the merchant was throwing in a free accessory pack with purchase, plus free shipping. He takes better care of that iPod than I've EVER seen him take care of anything. You can do this easily in the grocery store. As a family we've tested all the off-brands and decided on which ones you can cheap out on and which ones you can't.
Gave them reasonable, if not superior, things to do for free or cheap. This is key. My boys love restaurants, mainly because they get to pick what they want. The simple act of making fun weekend dinners like burgers and fries or tacos at home has literally made a non-issue of the restaurant thing. And allowing them to plan and/or make dinner. We also do a lot of hiking, which they love. I taught them how to go on the library website to reserve books and movies, which empowers them and teaches them all the good, free stuff you can borrow. We always have a ton of art supplies and things in the house for creating with. I dug out a lot of games and puzzles they've never touched. And now we have Wii sports, purchased for free with bank card points, which I'm shocked to report we are all having a ball with. Nearly every Saturday night we are hunkered around the TV taking turns at boxing or archery or bowling. Very very fun, and I can't believe how sore my arms get!
Set limits, which created priorities. Over the summer I refused to buy a pool pass. Way too expensive, and I had a feeling we would be too busy with other things to make it worthwhile. But I did offer to pay for five trips to the pool, which would run about $100. The pool in our area is large and has many different areas, so by packing a lunch and making a day of it, I felt it worthwhile. They really wanted a pool pass because a lot of their friends had them. I told them, fine, but that they would need to give up something worth about $300, which would make up the difference for the $400+ membership. Soccer, scouting activities, baseball, camping, it all adds up and we can't do everything. In the end, we only ended up going to the pool four times because we were so busy doing other things.
Has it all helped? Yes! I expected a fight when I first brought up this idea of a no-spend month. Instead, it has been almost a non-event. I've only had to remind them a couple of times that we wouldn't be buying unneeded things. They have not complained once about the restaurant thing, so we took them out (on a gift card) after the Pinewood Derby on Saturday. They ate in near-silence. It is miraculous. We even ended up in a Dick's sporting goods store the other day for a "recon" trip. We'd been out with their grandmother and they wanted to stretch their legs (it's cold here!) I thought, oh no, this is going to be a wrestling match. But we traversed the store two or three times, with them checking prices on different things. They couldn't help but notice how much more expensive things were than at the second hand sports shop and talked about the things that are worth buying new versus used. The most interesting conversation I've had with them this month involved us coming to the conclusion that although No-Spend month is coming to an end, we should never go back to the way we were doing things before.
Bottom Line: It's about trust and empowerment. As I read through all this the theme that pops out again and again is that we're giving them the information they need, empowering them to make decisions, and trusting them to balance their own wants and needs with the perspective of the well being of the family. It has not been an overnight transition by any means, but rather something we've whittled away at over time.
How the month is going overall. Pretty good. Since my last post we've only spent money on gas, our YMCA membership and our Netflix membership. I'm trying to get through the end of the week without another grocery trip. We still have a ton of stuff in the freezer to make meals with, and plenty of things for kid lunches. I almost let husband talk me into using our apple gift cards from Christmas for an Apple TV. I'm sure it's a fine product, but we don't need one more thing in this house to feed! And honestly a lot of electronics really amount to another mouth to feed. We did take the kids out on the last of our bank card bonus points, and their grandmother took us out for lunch on our free day yesterday. I paid for the bowling, and thank goodness I found this deal online for $5 off per person! Our outing with Oma was fun, and a chance to talk about "spending out" on things that you value. We don't see their Oma often, so when we do it makes sense to really have a good time together.
What are your thoughts on kids and money? What works for your family?