Kids' first money lessons: spending wisely
Teaching your kids how to save is important. ''But it's better to teach wise spending first.'' So says Grace Weinstein, a personal-finance and child-development expert who has written extensively on children and money. In her view, a child's ability to spend intelligently is tied up with his being a generally secure person - being willing to try new foods, for instance, and to make friends in new situations.Skip to next paragraph
Subscribe Today to the Monitor
A child continually consigning his shiny coins to the piggy bank - or to a real bank, where for all he knows they are lost forever - may have no clear idea what he is saving for.
Ms. Weinstein strongly advocates giving children a regular allowance big enough to cover routine expenses they can handle themselves: bus fare, for example, and some discretionary purchases. This is important if the children are to learn to choose between, say, bowling on Saturday and ice skating on Sunday.
Parents must be aware that the prices of childhood essentials such as comic books and candy bars have risen alarmingly since parents themselves were in the market for these commodities. ''Five or six dollars a week for an 11-year-old sounds like a lot,'' Ms. Weinstein notes, ''but the allowance shouldn't be just a bare minimum that's continually being supplemented.''
Routinely supplementing the allowance doesn't help the child learn decisionmaking. ''And it gets to be such a manipulative thing. The kids say, 'Let's not ask Dad tonight; he's in such a crummy mood, it will be better to wait till morning.' '' Or they catch him in a mellow mood and get away with what they can.
All this argues for parceling out a fixed sum, as regularly as parents expect to receive their own paychecks.
The amount of the allowance should be reviewed fairly often - perhaps every two or three months when the kids first get started. After a while an annual review - perhaps every fall at the beginning of the school year - should suffice.
Small children should get their allowance weekly, Ms. Weinstein says, but as they become older they should be learning to manage their money over longer periods of time; in high school a monthly or even quarterly allowance might be appropriate, and college students should be learning to handle money over a semester.
Another point Ms. Weinstein stresses strongly is that parents should treat sons and daughters equally. ''So many times the girls get an allowance and the boys don't, because 'a boy should earn his own way,' or boys get an allowance and girls don't because 'boys need to finance their social life,' or parents feel a need to control their daughters' spending. And manipulative behavior is encouraged in girls - Daddy's little girl wheedling money out of him. That kind of behavior is not considered cute in a boy.''
Ms. Weinstein also does not think much of docking the kids' allowance as a means of punishment; in her view, this ties with canceling TV privileges as the most unimaginative punishment parents mete out.
''The allowance is a learning tool,'' Ms. Weinstein says. And so children should no more be deprived of their allowance than they should of their schoolbooks. ''And kids need to have room to make mistakes if they are to learn from experience. So many times, the first time the kid buys an expensive shirt that shrinks the first time it's laundered, the clothing allowance gets yanked, and the lessons are missed.''
She doesn't see an allowance as wages for daily chores. ''Children should do their chores because they have a responsibility to the family. If they don't do their chores, you shouldn't cut off their allowance, but rather tell them, 'You can't go outside until you do your chores,' or whatever.''
She also urges parents to be a little more creative in assigning chores. ''So often we give the kids the jobs we don't like to do ourselves. Or we make them empty the wastebaskets. But why not let the kids do the cooking, for example? Instead of having them do the cleanup afterward.''
She distinguishes, moreover, between routine chores and special big jobs - putting the storm windows up, for example, or cleaning out the attic. She recommends parents negotiate these jobs with the kids on a businesslike basis - and that means giving them the opportunity to turn down the job. ''Lots of kids would much rather play than earn money.''