Kids and money management

(Today’s column)

There is an interesting recap on Blogher about parents’ ideas on how to teach kids the value of money. One father says, “I don’t like the word ‘allowance.’ It looks too much like receiving money whether you work for it or not. I personally do not believe this helps to prepare kids for the real world where they are expected to get out there and earn a living. So around the frugal family household you actually have to work to get paid.”

I do not subscribe to that approach. We tried it but we realized it was a huge mistake. I know it’s the “modern” way. But I look at it more as the “capitalist” way and the “materialistic” way — making kids do chores and the amount of allowance they receive are based on what chores they manage to finish. Parents are not employers counting hours worked and tasks performed. Parents have parental obligations and part of that is providing for their children while teaching them about responsibility. Teaching kids to manage their money

Parenting Advice sums it up nicely: “It is best if the children are given an allowance that is not specifically tied to completion of the chores… We want them to complete their chores to help them develop responsibility and skills that they will take into adulthood, not because they are being rewarded with money.”

Now, that makes more sense to me. But in practical terms, how do we do it? When the kids were much younger, they received a daily allowance that was disbursed to them weekly. It was pin money, really, P25 per day if I remember correctly, since they really didn’t spent anything in school because they brought packed lunches and snacks. The thing with such a small allowance, especially when disbursed weekly, is that they didn’t really learn to save. When the weekend came, we’d go out and every little item they saw and could afford (key chains, coin purses, pens, knick knacks…), they would buy. And we couldn’t stop them. We had no right to because it was their money. We couldn’t even say, “Save your money so you can buy the pair of Chucks or camera lens that you want.” With the amount of the allowance, it would take years to save enough for a decent pair of sneakers. So, everything turned out to be an exercise in futility.

So, one day last year, in between classes at HEdCen, I was having this chit-chat about money matters with my students. A boy in the third year class, Emilio, suggested a larger monthly allowance — a realistic amount good enough for major buys so that its owner would think twice about spending on every trivial thing he/she saw. But what was a “realistic amount”? I polled the students present and willing to give out information and we reached a figure — P2,000.00 per month for a high school student.

I listen to kids, okay? They have perspectives adults aren’t capable of. We need to respect them more, really. So, we tried Emilio’s suggestion. P2,000.00 per month per kid but my husband and I still paid for things they needed — clothes, shoes, bags, books and everything they needed for school. And the girls still brought packed lunches to school. What happened? Our older girl, Sam, bought the dog of her dreams with her savings. She’s going to have a large new crate constructed for him too — with her money. She volunteered a deduction in her allowance for the dog’s upkeep. Our younger girl, Alex, en route to becoming a multi-media artist and whose love for anything anime and manga can’t keep her off Comic Alley whenever we’re in the mall, spends her own money when she wants those endless anime DVDs.

And when the girls go out with friends on Fridays or on weekends, what they spend, they take out of their savings. Will they order extra fries and a sundae while hanging out at some junk (err, fast) food joint with their friends? Can they even afford to go out with friends on a particular weekend? They decide because they know how much they can afford to spend at any given time vis a vis how much and how fast they want to save for their next major buy. In short, they learn to set priorities. They learn to distinguish between what they really want and what they can do without.

Sure, we want our kids to learn the value of hard work. We want them to study well, learn how to cook, wash the dishes, do their laundry, clean up their mess, clean up after their pets — but it has to be because they understand the consequences of being a moron around the house rather than because they expect to be rewarded with money. I just don’t want them to think that no deed ought to be done unless payment is in the horizon. Many times, accomplishing something is a reward by itself. The self-satisfaction for doing something on one’s own boosts self-respect and self-confidence, and those are priceless. To attempt to attach monetary value to them is simply idiotic. We’re living in such a materialistic world already; do we help some more to make material girls out of our children?