After finding birthday money scattered in various locations that were not our kids’ piggy banks — the trunk of a toy Corvette, a glasses case and an abandoned pencil pouch — it became clear our daughters didn’t understand the value of money.
We needed to do something. A brief Google search led me to Ron Lieber’s 2015 book, The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous and Smart About Money. A personal finance columnist for The New York Times and also a father, Lieber offers sage advice about why we need to talk to our kids about money, as well as practical tips for teaching about the values tied to money. Using Lieber’s suggestions as a model, we set up a new money system for our girls.
How much allowance?
First, we located three glass jars for each daughter and labeled them: Give, Save, Spend.
Next, following Lieber’s recommendation of paying 50 cents to $1 per year of age per week, we established a weekly allowance of $4 and $3 per week, respectively, for our girls, ages 8 and 6.
We set a weekly alarm on our phones for Saturday morning so we wouldn’t forget to pay, and we started hoarding single dollar bills in a designated allowance envelope to have cash available. Although it seemed sort of nuts, we complied with Lieber’s firm belief that allowance shouldn’t be contingent on doing chores, but should be used as learning tool. He believes kids need to learn about money and spending now — while the stakes are relatively low — instead of making bigger mistakes with lasting damage as young adults.
In our house, if chores aren’t done, we take away other privileges such as seeing friends or screen time. So far, it’s worked surprisingly well.
Each week when we pay allowance, our girls divvy up their dollar bills into the separate jars. We allow them to use their Spend money for whatever they might want — even if we think it’s foolish. Predictably, those funds have been used for candy, toys from Dollar Tree and even sugary cereal.
However, our girls’ savings accounts have also grown, and they’re very proud to show off their deposit slips after a bank visit. Since last summer, our daughters’ Give money has gone toward replacing playground equipment at school, new socks for kids in need, Sunday School offerings and the rescue cats at Cafe Meow.
Using real money — verses a digital app or cash log — has presented its issues. We busted one of our kiddos siphoning money from her Save jar into her Spend jar to fund an L.O.L. doll purchase. We also realized we needed to emphasize that coins are just as valuable as paper bills, after finding about $2 in coins in the Barbie Dream House. It’s a work in progress, but a worthy one.
Learning life lessons
I now understand the importance of intentionally talking to our kids about money. They won’t learn our values by osmosis, and their allowances — and subsequent decisions — give us weekly opportunities (at least) to discuss what it means to spend, save and give money.
Lieber emphasizes the meaning behind the money: “Every conversation about money is also about values. Allowance is about patience. Giving is about generosity. Work is about perseverance.”
With these conversations as a starting point, money can be used to help our kids learn about spending, saving and giving. What better way to teach our values than to give kids opportunities, with support and love, to practice what we preach?
Laura Ramsborg is a literacy coach and writer who lives and works in Bloomington. Follow her on Twitter at @Ms.RamsborgReads.