When I was knee-high to a grasshopper (giving away my advanced age), my first recollection of having an "allowance" was being paid a penny a day to keep my room clean. I was maybe four or five years old tops when my Dad put a calendar on my bedroom door that was closely monitored by my stay-at-home Mom. At the end of the day, they would collectively put a mark on the square with either an "X" (fail) or a "$" (win) denoting how I had performed on that particular day.
At the end of the month, I'd get my "paycheck," in the form of a handful of change presented to me inside a sealed envelope printed with my name on it to be put into my piggy bank or later to be spent on candy or other treats I whined for at the grocery store. As I grew older and the value and amounts of money began to increase, other forms of "income" included coins in exchange for lost teeth found under my pillow or receiving a crisp dollar bill from a relative on my birthday and other holidays began to occur.
1. Being Fully Accountable
Many financial experts recommend opening a savings account for your child, and the sooner the better. For the best teachable moments to be had with your kid having their own active account is ensuring they're being held responsible for monitoring this type of ownership. Back in the day, my "bank book" fit into my back pocket and was stamped with each transaction directly in front of my face by a friendly teller. Not the case anymore considering all of today's technology when the majority of these deposits and withdrawals are happening online.
Think of it this way, while my antiquated, old, paper bank book was about the same size as a smartphone, it paled in comparison to the number of transactions and cyber threats possible associated with today's online accounts. Ensure you're making it clear to your kid they need to "babysit" their bank account (while you're also monitoring it in the background) and watch for any funny business that looks out-of-place.
2. What An Allowance Entails
Simply giving a child a set amount of cash provided to them on a certain day every week in the form of an allowance sends a seriously bad message to children when it comes to money. There must be an exchange of certain services being provided compared to those dollars being earned or this entire concept is completely wasted on young minds.
Even the most menial of tasks can be attached to a cash reward and children will appreciate this fact. More enterprising kids (like me) may seek out monetary rewards in exchange for performing a certain task. For example, when we lived in an apartment complex, I went to the manager and offered to pick up litter and trash on the grounds once a week in exchange for a quarter. It was a win-win situation for both of us and every Friday like clockwork I'd bring my bag of refuse into the manager's office for payment.
3. Accomplishments And Rewards
Another favorite childhood memory I have (especially as an author) was writing and winning an essay contest held when I was in middle school. I won a whopping $50 grand prize during the Bicentennial period with my revolutionary piece on Paul Revere's ride. I took a portion of the proceeds and with my parent's permission, I purchased a red-white-and-blue bean bag chair that I'd been eyeballing. Considering my father was an Air Force veteran and along with my mom, they both beamed with pride over making this type of practical purchase.
As our children continue to age, they'll begin to more fully understand how money actually "works," and how to save in order to invest in their future. If they get in trouble with debt later in life, parents can point them in the right direction for solutions on how to solve this type of dilemma. In any event, today's financial folks have plenty of opportunities to teach their kids about the value of a well-earned buck.
If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a free financial analysis.
Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs. You don’t have to struggle with high-interest credit card debt any longer.