Money Management, Kid Style

TMS and I are trying to teach our children fiscal responsibility. Being that they are 6 and 9, this is no easy task.

Our 6 year-old is tight with a buck. I suspect he will be referred to in the future as "Two Buck Jim" even though his name is not Jim. Two Buck Jim is the name my cousin gave my uncle after repeated congratulatory cards contained only two bucks. But for our 9 year-old, money has no value. We decided it is time to teach them how to manage money.

We began with an allowance system. We assigned chores, and, if they were completed throughout the week, on Saturday they would be rewarded with 3 tickets, each ticket representing one dollar. The first ticket was put into "Long Term Savings" (college), the second was put into "Short Term Savings" (gifts for family members or charitable donations), and the third was put into "Personal" which was their own to save and do with what they pleased.

The flaw in our system? Follow through on Mom and Dad's part. We weren't that good at "the system". One or the other of us was always in the middle of something and couldn't stop to organize the tickets and manage the six envelpoes for the two kids.

We came up with a simpler system. We again assigned chores and paid them cash on Saturday. The flaw in this system is that I am required to have cash, singles no less, on hand each Saturday. Needless to say, there are a lot of IOUs going around.

Our 9 year-old would do chores whether he was paid or not. The 6 year-old doesn't do his chores and still expects to get paid. We, of course, stopped paying the 6 year-old. The 9 year-old came up with a solution. If the 6 year-old helped him with his chores, he would give him a portion of his weekly allowance. I took this as a sign that he must be learning something about money management and considered it a small success.

Tuesday while shopping, they found a $40 computer game they wanted. TMS gave them a resounding "Sure, I'll buy it for you!"

A-hem. Aren't we trying to teach them fiscal responsibility here?

I told them that I would put in half if they would split the other half and share the game. The older son had to figure tax, subtact half and divide by two to get the amount owed to me. I felt like SuperMom. In one transaction I had them sharing AND doing math. (Not to mention teaching TMS a lesson as well.)

My short-term memory sucks so the deal struck on Tuesday has long been forgotten. Our 9 year-old walked in this morning with 11.75 in crinkled bills and change in his two little, cupped hands. He looked up and said, "Here you go, Mom". My money management skills went out the window. I had to muster up all my self-control not to say to him, "Sweetie, go put your money away, I don't want to take it from you." Instead I said a simple, "Thank you." and left the room screaming to myself to focus on the long-term goal here. Take the money! This is what the system is set up for! Don't get soft on them!!

I had to follow-up with the 6 year-old who just told me to go in his bank and take the money. Since we were leaving soon for school, I chose not to teach another lesson here about respect and I just went and took his money. He only had $5. Instead of taking his change, I decided to keep only $5 of the 9 year-old's money and snuck the other $6.75 bills back into his bank. I then put the $10 that was "given" to me in my sock drawer for allowance payday on Saturday. Brilliant.

I feel good about the system.

Epilogue...
Even though the 6 year-old can be disrespectful at times, he too has his strengths that the 9 year-old lacks. I caught him cleaning the bathroom shortly after he told me to get the money.