how do you make your kids split up their money?

[Renthead Mommy]

My almost 8yo is now in a position to earn money. He doesn't get an allowance, but he's now got things to do that can actually earn him money. Technically he's been earning for months, but he was in pay back mode for glasses he broke and has finally reached out of the red and into the black! And now that he's in the habit of extra chores, I see him starting to turn a profit!

 

I had a bank account from about the day I was born. I'd take birthday money and put it into the account. I think my mom would leave some out for me, but most I put it in for when I wanted something big. I don't ever remember taking money out for stuff until I was in at least 8th grade. I just never spent money/never 'needed' anything that bad. And by 6/7th grade I was 'saving' for college. So then all my birthday/christmas money went into the bank and I spent anything I made working my very part time jobs. By

8th grade I could walk to the bank and take money in and out. I remember I had 4 sections. Money for play, money for a car, money for 'what if/emergencies and money for college from 8th grade up. Currently, at not quite 8, I don't think he really needs to worry so much about cars and college! LOL! (Even though I did at 8!)

 

So how do you split up their money? Part to spend part to save? Save for what? Save for one toy? What about a bigger what if save? Do they do a save X amount of money for this thing, and once it's gotten they start over at $0 again? How do you teach them to save for what if's while saving for fun? When do you make your kids start thinking about saving up for college and cars and things like that?

 

We don't do church, so there's no need to save for anything like that and even if we did I'd give him money because I'd would have been the one to decide we were going (sort of like if I invite you to a movie I pay). He gets money at christmas time for dropping into the Salvation Army pots, but that's just as we pass them, it's not like we plan for it.

[bettyandbob]

My dd started pet sitting at 8. She made a lot of money at that age and still does. We opened a bank account for her and let her decide what to save. We discussed reasons to save. She saves most of her money. The first thing she saved for was a digital camera (a very nice one). Then she saved money and after a while decided to get an American Girl doll. Last summer she was taken to the mall with her French teacher and a girl the same age who was visiting from France. My dd at that time had no knowledge of the allure of the mall. She took her own spending money and made her own decisions. My dd is 12. She carefully contemplates her purchases, she decides on her own what to give to charity/church. She has enough money in the bank if she decides wants/needs something. I think because she earned and is aware of the work that went into earning she has developed her own sense of how to save and budget. I don't think it would have helped for me to regulate.

 

My ds is older and has not had as many opportunities to earn. He is not as good as his sister at regulating himself with spending. However, if he doesn't have money, that's just the way it is. He has begun to take notice that his sister is able to do or buy things when he would like to. I think he will begin to pick up on what he has to do. If I did that for him, he would just get angry and not learn of thing. It would become about mom controlling him, not a lesson in how to budget.

 

I don't tell my children they have to save birthday money either. My mother took every single birthday check and put it into a savings account I didn't have access to until college. This included very small amounts. I don't think gift givers really like that. I remember my grandma getting upset when my mom confiscated $20 bills from my brother and sister at their birthday party one year (they were young teens at the time). I take my kids shopping after holidays and they write thank you notes saying what they purchased with the money.

 

Anyway, my kids have savings accounts, but I don't regulate them. I also don't bail them out. If they don't have the money to buy or do something, I don't give it to them.

[Brindee]

My kids split their money this way:

 

10% Tithe

5% Offerings at church (and we gave them more)

50% Savings

35% Their own for what they wanted.

 

My oldest always wanted to spend his, even though he was picky with what he got with it.

 

My younger two always wanted to save more. They didn't have much to spend it on, so saved it. OR, they'd find a project or something that they wanted to donate some funds or materials to.

 

When they got enough, each child opened their own savings account at our Credit Union, and earned interest. They had to get permission to get any of it out, and all three still have a good amount in their accounts.

[Cricket]

10% offering for church

20% spending money (that really cuts down on arguing over whether or not they can buy a pack of gum or something!)

20% short term savings (like for a specific toy)

50% long term savings (this they will get when they are ready to go out on their own)

We don't expect them to save birthday money. I figure my far-off relatives would have gotten them a gift if we lived closer so they can spend that money on something special they want. Many times our oldest will save that money anyway.

Edited March 31, 2010 by Cricket

[joannqn]

We use Family Mint for the kids. It allows them to set savings goals and see the progress they are making.

 

My DS8's savings plan is set so that 50% goes to long term savings (this is for post high school), 10% tithe, and 40% to do with as he likes. He has a couple of saving goals set up for that 40%.

 

My DD10's savings plan is completely different, with some weird percentages. She makes double the wage that DS makes because she wants to have responsibility for purchasing her own clothing. For her, 34% goes to long term savings, 10% for tithing, 35% for clothing, and 21% for general spending. I came up with these percentages because I wanted the pay increase to cover clothing but not increase her general spending. It's a bit more controlled than just handing it over to her completely.

 

We went on a field trip last week and the kids each found something in the gift shop that they wanted. I told them that I would pay for half but they had to pay for the other half with their savings. They both still wanted the item. DD tends to do more work so the loss wasn't as big for her. DS, does less work and has less money saved. When he had to take most of what he had from his most prized saving goal to pay for his purchase, he regretted buying it. I think he'll remember the lesson. :D

 

Family Mint is definitely working for us!

[Brindee]

Just wanted to add: Starting them young like your ds is a great idea! We started ours young, and now that they're older, they STILL tithe first and put a chunk in savings, though it may not be 50% for the oldest anymore. I love that it's become automatic for them to do that!

[Peela]

I tend to feel that its important for them to learn to manage their own money, so I dont try to control it. They both have bank accounts and they save.

We are a family who saves but also believes in the flow of money- it is important to us not to save at the expense of enjoying today. We do both- we spend on things that we really want, and we also put some aside for later. The kids have picked this up and they do the same. We really try not to teach them a poverty mentality by getting them to save more than feels natural for them.

My son tends to only spend minimally on small things like junk food..he didn't come to the movies last night with dd and I because he didnt want to spend his money. But he will save for large items - he just bought a bike for $400, he bought trendy Oakely ysunglasses for $200 a while back, and last year he bought a snake and the whole set up that goes with it for $600. These things each took months for him to save.

Dd managed to save $2500 for a camp she wanted to attend, in less than a year. It motivated her to get a job and to save.

So...I have never felt the need to control their spending ...they are learning about it quite well on their own.

[paojava]

We also use FamilyMint.com. It's a great free on-line "banking system" for kids. We have been using it for about a month now. I like that we can automatically add allowance and seperate it into the different goals our DS7 has (which change frequently!)

 

Right now, we are working on our first goal--a special toy he wants. He gets $7 a week (since he is 7), plus tooth fairy money and odd dollars from relatives, etc.

 

Once we reach the first goal, we will try with two goals, and so on. Because it is his money I am letting him choose his goals and splits (within reason). I want to make sure HE knows what he wants and how to attain said goals.