I give her an allowance equal to $1 for every year of age per week. I make her put 10% to charity and 10% to her savings account. I also make her bank 10% of her gifts from Xmas, bday as well. She is 12 and has $5600 in her own bank account. I deposit $25 per month in it, but the rest is “her” money. I give her the envie to open when the statement comes in and we go over it to see the interest payment and to balance the deposit slips against it as well. She decided that the purpose of her rainy day account is to pay for her wedding (in the very far distant future, I hope). I also stopped buying comic books, videos, games, music, etc., for her when I started the allowance. I do still buy real books for her, but all the fluff she wants, she buys. She figured out in a hurry that a used Nintendo game plays just as well as a brand new one! I also make her save up to pay for her friends’ Xmas gifts, while I pay for the ones for family. She has learned how to save up for big ticket items, where I match her dollar for dollar. She got a wii that way, and the parental unit gets to use it too as it is half ours. We have also had discussion about stocks and the market; her grandmom gave her a few shares of stock and we look that up periodically and talk about how the price gets set, etc. I also get her to help me “do the math” at the grocery store and help evaluate which products are okay in store brand and which need to be name brand for taste or perceived value. I think I will take an idea from a prior commenter and send her off with the coupons to “hunt and destroy” the grocery list – that’s an excellent idea!

I have also made it a point to discuss the cost of living with her — here’s the rent, the car payment, the cost of fuel, the cost of food, insurance — as well as explaining why we have to have them ( we can’t walk to work; what insurance is, etc.). I have not told her the dollar amounts of either my pay or our bills, but we have plugged in examples based on minimum wage, and she can’t see how one could live on that! I told her flat out she would have to go for more education to hopefully get better pay and that seems to have piqued her interest as well. We have also had discussions about debt and how debt is bad, etc., which may not stick. I have refused to “loan” her money and have refused to advance her allowance, too. I also make her work in my office, for which I pay her, with a check. She doesn’t like doing the work, but I ignore that, as she loves the check!

I don’t know if any of this will set a habit for the future, but I hope that it will at least make money management easier for her, and that she won’t be so scared when it’s her turn to deal with it.

My nephew’s at that age now where he asks for everything under the sun and cries when he doesn’t get his way. My sister just ignores him. I don’t know how she tunes the wailing out, personally, it drives me nuts! So, I’ve been trying several activities like making the list and letting him pick the product based on the amount he can spend. I’ve also been teaching him to look for in-store coupons. I don’t think this has really sunk in all the way as he seems to think that by his spending less on the groceries there’s more money to spend on what he wants, he is at least learning the concepts and the ability to rationalize that there is money left over. Now we just need to focus on saving.

My kids have thrived on the sense of empowerment and independence they get going through the store together on their own and having some input and control over what’s on the menu that week. The side effect is they also have an acute awareness of how much food costs and how their choices affect the family budget.

My rules were simple:

1) She started with a $50 cushion
2) I made a quarterly deposit into her account
3) 10% of the deposit had to be transferred into savings
4) 10% of the deposit went to charity of her choice
5) If her balance ever went below the $50 cushion, she would forfeit the next quarter’s allowance

She’s nearly 17 now and has never dipped below the $50 minimum.

I’m a proud Dad.

I want my kids to be aware of and knowledgeable about money, and I want them to use it wisely, but I also don’t want them to develop a guilt complex about their cost of living. Saying something along the lines of “see how much it costs me to keep you? So stop begging for gum at the grocery store!” seems to send the wrong message.

Just the other day I was in a store and I heard a little girl say “but they take credit card” after her mom said the item was too expensive!