Wednesday, July 2, 2008

"If you want more money, just wiggle your tooth!

So says the little stick figure cartoon on a paper covered with numbers.

Pook pulled out his bank last night to see how much money he had. Pretty soon the table was covered with coins and the paper covered with figures as he added it up. Then Bug joined in and Pook counted his out for him too.

CD and I read an article in the Atlantic Monthly many years ago (maybe even B.C.) about teaching children about money. I believe it was from a book called The First National Bank of Dad. While there is much to be gained by reading the book, we simply took the main point from the article and never read the actual book. I probably shouldn't admit that. But we strongly agree with his theory: If you let them practice, they will learn.

When Pook started becoming interested in money, we let him earn it in simple ways. My favorite was earning a nickel every time he read a board book to his baby brother! Then the whole allowance issue came up- to earn money by doing chores or to receive money for learning purposes and still do work around the house purely as a family member. We sort of expect help but give the money regardless. Perhaps inconsistent about that.... We're cheap so we started Pook at 25¢ each week. Bug felt left out, so we started giving him a dime. (I apparently did the same thing when Sister MD started getting an allowance, and I'm told I received a penny each week. He was lucky to get a dime since he never remembered what it was anyway.)

I found a fabulous piggy bank called The Money Savvy Pig. It has four slots for money, going into four compartments (the legs of the pig). Each is labeled: save, spend, donate, invest. Each time he put money in, he meticulously marked the spot with a bent paper clip. Slow going. We ask the kids to use (at least some of) their own money to buy each other Christmas and birthday gifts and 25¢ a week wasn't cutting it. So at his birthday, turning seven, we decided to give him $1 a week. (Bug, again, felt left out, so we changed his allowance from a dime to two nickels. Generous!) Not only did we increase Pook's allowance, but we started the first part of his money education- we gave him interest on the money in his "save" compartment. (Note: I have discontinued use of "invest" since we aren't quite sure what to do with such small sums. I think we'll come back to it in a few years.) Like The First National Bank of Dad, we gave him 10% interest so he could really see his money grow. Quarterly.

He's into this idea. Since June 30 marked the end of the second quarter, we were due to count up. Which is why we had money all over the table:

Spend: $2.30 (He recently used most of it, with a gift card, for an expensive hard back book*)
Save: $18.76
Donate: $6.95

Each quarter he puts his "donate" money in an envelope and marks it with the amount and the charity he chooses. He has given to our church, to a breast cancer run for a friend's mom, and to the school penny drive. No charity will turn down his money, so I'm all for letting him choose. He then added $1.88 to his "save' compartment.

Will all this turn the boys into "money savvy" kids? I'm not sure. Sister MD always had ideas to earn money. She made macramé bracelets and plant holders, she sold magazines, delivered newspapers, sold Girl Scout cookies. She never had (has) any money when she needs it. Still. I was lucky to sell a dozen boxes of cookies, and that only if my dad took the form to the break room at work. But when I wanted to buy something I'd start pulling out wads of money from my dresser drawer. So much so that my mom thought for a while that maybe I was swiping it from Sister MD. I just never spent any of mine. I seem to have always been tight with it. So, we'll see how both Pook and Bug turn out. Pook has always been a saver, Bug I'm not sure yet. His pile of dimes and nickels, combined with his $4 birthday money and the $7.65 from the "lemoned stand" came to $20.21. Not bad for a four year old!

*The book Pook bought at the bookstore for $16.95 was just located on Amazon for $6.95. Ouch. A lesson in economics, I guess.


  1. We went back and forth for a while about money for chores vs. an allowance with no strings. We ended up with a sort of hybrid. We've made a distinction with AJ about chores that you do to be part of the family (taking care of yourself and yours stuff plus other chores that get added as you get older. Right now that's mostly just setting the table, taking out the garbage on Tuesday nights, and occasional dusting. Eventually he'll probably work his way up to helping with dishes and mowing. But if he wants to earn extra money, we try to find jobs for him, although we don't guarantee them and we make sure he really does some work. This usually isn't too hard: in spring and summer, there is always weeding and picking up sticks in the yard. We don't (at the moment, at least) do the spend/save/invest/donate thing, although I like the idea and have considered it. We do, however, try to get him involved in more concrete charity projects -- the school penny project, collecting his old toys and clothes and taking them to the charity shop, etc. One thing I hope to do this year is take AJ to one of our local food bank's family days where kids and parents help pack up food for families in need. And he'll do a food drive with the Cub Scouts this year. But we haven't really targeted the money part of charity yet. I know someone who does matching gifts for charity but not for the other things. We do encourage saving, but don't yet mandate it or match it. Instead, we encourage him to put money he's saving in his bank account. He's pretty motivated by the interest he gets. And once it's there, he doesn't usually want to touch it.

  2. We give our kids their age in dollars every two weeks (when we get paid). We don't have a formal plan for saving, but they are encouraged to put money in the bank every time their wad of bills swells. Something to think about, though... We also have a rotating chore chart - Trash & Bathroom Sinks, Floors & Dusting, Kitchen that is not linked to chores. They can lose allowance $$ for punishment and earn $$ for extra chores.