Giving kids Real Life money experience

I’ve been mulling over the notion of allowances for some time now. I’ve talked with various mamas I respect about the systems they have in place for their kids. They’ve come up with various schemes that appear to be a good fit for their respective families. But I have yet to figure out a way to incorporate allowances into my children’s lives while still keeping true to our particular values and in a way that is meaningful to me.

My objections to allowances are many. But what they all boil down to is a feeling of allowances being artificial and arbitrary. There’s too much control at my end and too little at theirs. Ultimately, the idea of distributing random amounts of money to my children in exchange for duties to which I’ve arbitrarily assigned a monetary value so that they can buy things that I’ve decided I don’t want to buy for them doesn’t seem Real. Nor does forcing them to save money whether they want to or not and introducing arbitrary rules to govern this process. Accordingly, I’m not convinced that my kids will really get much out of the experience in the long run.

Well, I recently had a lightbulb moment after reading a post on a finances forum. Someone mentioned getting our kids involved in the family finances. And the more I thought about this, the more I decided that this was key to giving them a Real Life experience. As a child I had no idea what our finances were like, how money was managed in our family, what the money went to or how that was decided. And I certainly didn’t have any say in the matter. So the benefits I reaped from my parents’ incomes were understandably perceived as something I was naturally entitled to as their child. It was mystery money that came from some unknown place, was distributed in some unknown way, and ultimately ended up in my hands.

In our family, especially recently, budgeting has become a conscious process. We maintain spreadsheets that are updated regularly. We set limits on spending in various categories in order to achieve certain goals we’ve set for ourselves. Husband and I regularly discuss our finances to monitor and make any changes necessary. We may review various items, introduce new circumstances or make requests. It’s a constantly updated, fluid process. And it’s something that Daughter is not far from being able to participate in.

The more I mulled this over, the more I felt this was key. Here is Real money coming in. The kids are aware that the reason their father isn’t around during the day, or often not home in time for dinner, is because he works. So the sacrifices made to get that money are obvious. We’ve already talked about the fact that our funds are limited and that Husband and I make decisions about what we want to spend money on and what we don’t. We’re planning on establishing regular family meetings once Daughter is old enough to participate in a meaningful way (probably in another year or so), and during these meetings finances will be part of the discussion. Anybody wanting to buy something or change the way money is allocated will be allowed to state their case, and as much as possible decisions will be made as a family unit. By giving our kids a clear view of how money comes into the family and is distributed, having them see and experience what saving money can do, and by being a part of the whole money management process I feel they’ll be learning at a level that artificial economic systems like allowances just can’t reach.

This fits in with so many of our family values, not the least of which is how our children are educated. I’m excited that I’m onto something that I can feel really good about.

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Categories: learning, money matters | 1 Comment

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One thought on “Giving kids Real Life money experience

  1. DeeDub

    …distributing random amounts of money…in exchange for duties to which I’ve arbitrarily assigned a monetary value…

    When the kids grow up they’ll call that sort of thing…

    …a job. 🙂

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