Big Saving, Giving, Spending Kids

Our children are really impressing me these days. Was it one or two years ago? (Babe, help me out here, you know I am time blind.) Anyway, I cannot remember if it has been two years or one year.

Regardless, at some time in the recent past, Leanne implemented an allowance program with our daughters. They get their money in thirds, designated as Give, Save, Spend. Our oldest girls have totally impressed me, each saving several hundred dollars that they now have in a savings account.

As I've observed our girls, they are excited to save up their Spend money, too. They often claim they are saving it for some big purchase down the road. But not infrequently their desires change. One month they are saving for a doll. The next month they are saving for some toy. What I appreciate, though, is that they've developed the discipline of saving. They might reconsider what they are saving for, but they don't reconsider the act of saving. (I recognize that is partly because we have been making them save. And I understand that this discipline can easily disappear if not nurtured regularly. But I'm proud of their attitude. Saving is becoming part of what they want to do.)

A quick note on giving. We pretty much allow them to decide how they will use their Give money. I know some parents who do the Give, Save, Spend thing make their children give to church or some charity of the parent's choosing. What we do is to make suggestions. But they get the final say. This is part of treating children respectfully, I think. Help them make good decisions, but don't control their choices. I like giving them this freedom, too, because children are creative and generous. Our kids have come up with some cool ideas on where and how to give that I would not have thought up on my own.

Comments

[Noelle]

Awesome concept!

[online doctor]

parents should be the people who will teach there children on how to save money. Saving money is really important like now since our country has economic crisis.

[Stuart Fleming]

Great post Dave, and awesome to see some conscious money-teachings happening for your daughters!

If I may make a suggestion: divide the allowance into four parts, and add "invest" to the list of save, spend and give.

Why? Because 'saving' is just delayed spending. I see lots of young adults who believe they're getting ahead financially because they've saved $$$ for a car, or big trip, or even house - all of which are expenses and will leave them broke.

To really set your girls up with a financially solid foundation, teach them to put aside a 'wealth' component. Its purpose (once it has grown sufficiently) is to be invested in something that will generate an income of its own, like shares, their own business, rental property, etc.

With the 'wealth' mindset, your daughters could become 'rich by default'!

Smiles,

Stuart

[guynameddave]

Thanks Stuart. I'll have to give this some thought. I have talked to my kids about "investing," but usually about investing savings into a good business idea.

But I am especially suspicious of investing stocks (ETFs, funds, etc.) right now. I'll have to share my latest lame story along these lines soon.

My feeling is that it's best to try to invest in opportunities that are as dependent on individuals (self, friends, biz partners) for success as anything else.