Allowance Update!

Back on September 25th I posted about deciding to give my son an allowance. I was just starting out and was a little skeptical about how it was going to work out. I can honestly say, 13 weeks later, that it is working out great! I have followed Gail’s way and stuck to my guns even in difficult situations (my son has a real knack for talking me into buying him things) but by giving him an allowance, I’ve been able to turn the tables back to him and as a result he’s becoming a lot more responsible with money.

“Planned Spending” is his favourite “jar” because he knows he’s allowed to use this money to buy something he really wants. At $5 a week, it has added up quickly! He originally wanted to buy a microphone with a stand but, in true 11-year-old boy style, his goal changed about once a week. Eventually he decided he wanted a new monitor to hook up to our laptop. We went out and did some price comparisons and looked them up online and finally found one he liked. It was going to cost more than what he had but since it’s close to Christmas and since I will be using it as well, I told him I would pay half. So out we went and got the monitor. He was expecting the taxes but was a little surprised when the “Environmental Handling Fee” got added on but luckily he had enough to cover half of it. I think it taught him a good lesson about those wonderful “extras” we have to pay on pretty much everything!

“Mad Money” is where I’m surprised he has actually saved up a bit! He gets $1 a week and it goes towards snacks at the arena and any small impulse things he might see when we’re out and about. We went to see a friend of his play hockey a few weeks ago and usually he spends about $5 of my money on snacks and a drink. I told him he can take some of his “Mad Money” to get himself something…of course he scaled back and got something small. I think he really came to his senses and realized what a waste of money it is when you spend it that way!

“Sharing” is also $1 a week. We will be going out to buy a stuffed toy for the annual “Toy Toss” at our local hockey team’s fundraising game this weekend. He’s also used it towards a birthday gift for a friend. Thankfully he doesn’t get invited to too many birthday parties any more so he has time to accumulate a bit in between each one!

“Saving” is a $2 a week contribution (I upped it from Gail’s suggested 10% to 20% per week) and he hasn’t touched it. Eventually I will figure out if I want to put it into a TFSA or his regular savings account which he’s had for a few years. I think the TFSA would be a good idea so he can see how it works and start understanding investing…any thoughts on that one?!

I’m not saying there haven’t been any bumps along the way though! There have been a couple weeks where he didn’t get anything because he didn’t help me out at home and in one instance, he owed me a bit of money because I chipped in for that birthday gift but all in all, it has been great and he’s been learning a lot from it. Any time he sees something he thinks he wants now, I ask him how he’s going to pay for it. I get the usual “I’ll use my Planned Spending money” until I point out he has to save some more in order to get it! The urge usually goes away after that!

He has also started a paper route (my idea – but bad timing in the middle of winter) and I plan on putting his earnings from that into a TFSA. It has also proved to be a great bonding time for us because we do it together J

So to anyone who has kids that are taking your money for granted, I highly suggest giving Gail’s book, “Money Smart Kid$” a read. You and your kids will benefit from her simple approach!

Kristine

avatarAuthor Bio ~ Kristine  (30 Posts)

A single mom in her 40’s juggling a full-time career and a full-time job of being a “Hockey Mom”. She will be blogging about the trials and tribulations of keeping a budget on track while faced with ever-changing situations. Lives for road trips with the windows down and good music! Always looking for balance in life but will go with the flow till that happens.


6 Responses to “Allowance Update!”

  1. I had an allowance as a child – many, many years ago and it definitely helped me in managing money -(although I have strayed a few times). It not only taught me to be a good worker it helped me manage money. I can’t stand it when parents hand their child money left and right and do not require them to help at all saying the famous last words- They are only children once. Children need responsibility.

  2. I think the TFSA has to be in your name and not your child’s. You have to be 18 to have one.

    Great job on the lessons!

  3. Good job! Sounds like you are instilling some great lessons!

    In terms of an account for your son, many financial institutions have children’s accounts where the interest rate is a little higher (eg. ING/Tangerine is 2% – however, I believe you may also have to have an account with them).

  4. I do similar – my child gets $10 a week. We have the money savvy pig and it’s divided into four chambers – - $2 is donate (he uses it to buy toys for the toy drive at Christmas), $2 is invest (goes into his RESP at the end of the year), $4 is spending, and $2 is short term saving (aka planned spending) – right now the spending and saving $ are being saved for our upcoming trip to Florida in February.

    Although there are 52 weeks in the year, he only gets allowance for 50 of them – the week of Christmas and the week between Christmas and New Years have enough new toys and activities to keep him busy – he doesn’t need $ then – that way the amounts are even at $100 donate, $100 invest, $200 spending and $100 short term saving.

    And it’s amazing how much he rethinks what he wants when I ask him if he has the $ to buy it……

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