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Money and Kids - A Lesson Learned

Money Parenting

My 9-year old son has had an allowance for a few years now. We don’t tie it into chores for a couple of reasons: 1. We want the allowance to be a chance for him to learn about money, and how to manage it. If the allowance is lost because of not doing a, b and c, we lose that teaching opportunity. 2. We don’t want him to have the ‘option’ of not doing the chores because he feels he has enough money. Chores are a part of family life.

His allowance does come with some rules however. 10% of his allowance goes into the piggy bank (which when full gets deposited into a savings account) and 10% goes into a ‘helping others’ jar. He can use this money whenever they have different donation requests in school, or for a food bank drive or toy drive around Christmas. The rest is his to spend or save as he sees fit. 

Earlier this year, he accidentally broke his one year old Nintendo 3DS XL (it was sitting on his bed, out of its case and slid on the floor and that was that). Ouch. He was heartbroken and I really felt for him. He loved that game. We had spent a good deal of money getting him this game the Christmas before, and between himself, us and other family members there was a lot of money invested in different games and accessories. We looked at the option of fixing it, but it seemed that it was unfixable.

Once the initial devastation wore off slightly, my son started considering the options of getting a new one. One option was for Santa to ‘just’ get him a new one (as Santa had gotten him the first one). And if Santa couldn’t, maybe mom and dad could ‘just’ get him one for his birthday.
I realized that this was a teachable moment if I had ever seen one.
I explained that these electronic toys are very expensive. They can’t just be replaced if you are reckless with them and they break.
I told him that he would need to save his own money, until he can buy himself a new one.
“But moooooom, that will take for-eeeeeeevvv-er!” I answered that it would for sure take some time, but how long would depend on how dedicated he was, and how much he really wanted that game.

I really wanted him to be in charge of his own decisions. He could save his “spendable” portion of his allowance, as well as any extra money he earned doing additional jobs around the house, and we tried to keep it realistic (no, I’m sorry, I’m not paying you $10 for vacuuming the living room rug). It was a chance for us to discuss things like wages for different levels of work. There would be times where a bright, shiny new toy was so appealing to him that the far-away idea of the Nintendo game couldn’t stop him from spending some of his saved money. This was really hard for my husband who couldn’t understand WHY he would spend his money on silly things, instead of saving it for his game. But I told him that the really important lesson here was for our son to see himself, how the choices he made changed the time frame of his goal.

We made a savings chart for him to fill out every time he added some money to the pot, and anytime he spent some of the money, he had to go backward. 

It’s been an interesting year as I’ve seen him compare prices on toys and evaluate wants versus needs and figure out how taxes changes the final price on your purchase. I’ve watched him make some good decisions and some bad ones. There were times when the wish to “help him out just a little” was hard to resist. But today, eight months after he started, he finally got to walk into the store, with his own hard earned money, and buy his brand new, Nintendo 3DS XL. It was a real proud moment for him, and for me and his dad too. I hope that the lessons he learned during these eight months will stay with him for a long time, and that he has a new-earned appreciation for the cost of ‘things’. To save instead of borrow. And to enjoy that new game with a whole new perspective.

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