Too much too soon for kids?

[disneysteve]

"Professional" advice like from Mint.com thinks it is good to get a preteen introduced to credit cards(I think it was that site..it was referenced in an article). That I do not agree with.

They can't get a credit card until they're 18. We did take DD to get hers once she was of age. We wanted her to have it before she went off to college. I certainly wouldn't have done it at 9 or 10 even if that was possible.

[DaveInPgh]

We did a match scenario last year with her allowance. 50% match IF she put all of that week's allowance into her online savings account. 0% if she wanted it to go to her purse. She had to make the decision each week. She took advantage of the bonus must weeks. If there was something (usually a book) she wanted to buy, she would put it in her purse until she had enough for the purchase.

[Joan.of.the.Arch]

The money decisions they need to soon become acquainted with are mathematical value decisions. Once they are doing multiplication and division, and especially once they are doing fractions and percentages, they will have power to figure which among equal products provides the best value. That is something that extends to adult money decisions, so it is worth teaching it over and over in an everyday way until it is second nature.

An early money matter that I suspect doesn't happen a whole lot among kids these days is joint purchases. Say, both kids would like to buy the giant bag of pre-popped corn, but neither can afford it. They can pool their money either in equal parts or in differing proportions and then divvy up the popcorn proportionately....Or say, they want to buy a father's day present. They can split the expense of that; or perhaps Mom would pay for half, then each kid would pay for half of the other half-- by their age they should be firming up an understanding that that would mean 1/4 of the purchase price from each kid.

I don't know if you would allow this or not, but when I was a child in a big family the kids sometimes ~in desperation~ paid each other for labor! "I'll give you $0.30 to help me clean this room". (It was my own chore.) Sometimes the other kid would accept, sometimes negotiate for more, sometimes decline.

These kinds of childhood money management strengthen their ability to explain and communicate about money, to propose alternatives, to protect themselves against being swindled, to make decisions and agreements with another person. It makes real some of those "word problems" the kids encounter in school math class and makes them more prepared to do well on those school problems as well.

[GoodSteward]

They can't get a credit card until they're 18. We did take DD to get hers once she was of age. We wanted her to have it before she went off to college. I certainly wouldn't have done it at 9 or 10 even if that was possible.

They actually suggested to add them as an authorized user. I still say no to a credit card

[moneybags]

I won't let either one of my kids have access to my credit card. I watched my brother rack up 20k$ and my dad got stuck with it.

My kids both got a credit card (on my account) when they were 16. They used them for gas. In college, they use them for pre-approved items. Neither has ever abused this system. I don't know see how they could rack up any significant amount, as I keep an eye on my charges.

[DaveInPgh]

My kids both got a credit card (on my account) when they were 16. They used them for gas. In college, they use them for pre-approved items. Neither has ever abused this system. I don't know see how they could rack up any significant amount, as I keep an eye on my charges.

Not sure how long ago it was that GoodSteward's brother went on a spending spree, but there are definitely more controls available than there were many years ago.

[Outdoorsygal]

This is a great point.

The rule of thumb I've always heard is $1/year of age/week. So a 10 year old would get $10/week allowance.

That's about perfect. I think that is what we did at that but added on $5 to save in his piggy bank. He had dishes to do a few times a week, vacuum his room, help fold his clothes. Cleaned the bathroom once a month if I recall. It gives them enough $ to hang out with friends over the weekend and do something one day, hit a movie or out to lunch. Sometimes we gave extra and didn't count it as earned money, just so they could maybe do both.

We never quite met that guideline. We were always on the short side of it but not by a whole lot. But I think it's important to regularly reevaluate how much you're paying them. If they are making reasonable decisions with their money and just don't have enough, it might be time for a raise.

I completely agree. Nowadays $15 a week is probably perfect for that age group but we live in a high COLA area in California.
If the parents are poor thus cannot afford it, the children understand why they cannot get that much $$.
My parents were affluent but very stingy. Repeating that behavior with our child was not happening

.

[GoodSteward]

My kids both got a credit card (on my account) when they were 16. They used them for gas. In college, they use them for pre-approved items. Neither has ever abused this system. I don't know see how they could rack up any significant amount, as I keep an eye on my charges.

My mom gave him the card and told him to keep up the minimums. This, coming from someone who also has much debt and only paid minimums. Why pay it off when you don't have to? This was over 13 years ago.

When they get older I might consider it. It just depends on how they do with the money they have first.

As for the amount, I didn't get an allowance because my parents couldn't afford it, so this whole situation feels more like a "rich person problem" to me(I said feels..not is :P). The other kids their ages they do spend time with also have no money, and do not go around by their self. lol Where are your kids going at 9 or 10 years old that need to have 40$ of spending money without you?

[Nutria]

Where are your kids going at 9 or 10 years old that need to have 40$ of spending money without you?

I don't remember where I read it about 10 years ago, but a study said that the strongest indicator of whether a teen would abuse drugs was how much cash they regularly carried.

[AnnieG]

My Rules for Allowances

1. Never pay a kid for doing chores or responsibilities. You don't charge them when you cook dinner or wash clothes and they shouldn't be paid to make beds, do homework, or even babysit siblings. Families are not businesses.

2. The best way to teach about money is by openly talking about the cost of things, what you as a family can and can't afford, how to get good deals, how the family budgets and saves and donates. Being honest with them, including letting them share in money decisions, will go a long way towards teaching responsibility.

3. When they seem ready, start giving them responsibility for an aspect of the family budget that concerns them. Perhaps desserts when eating out, or buying snacks at the grocery store, or toys books and video games, or their clothing. Start with one and build up. Some don't even require that you hand cash to them. (For example, tell the children that they have $5 to purchase snacks each week while shopping. One of the advantages of this is that they are engaged at the grocery store and not constantly interrupting you with requests to buy snacks.) I remember when I put my teen in charge of his clothing spending and he started getting almost twice the clothes with the same amount of money.

4. Gift money is the best way to get them to save, donate, and spend. And then later the money they earn working for other people.

JMO

[GoodSteward]

1. Never pay a kid for doing chores or responsibilities. You don't charge them when you cook dinner or wash clothes and they shouldn't be paid to make beds, do homework, or even babysit siblings. Families are not businesses.

2. The best way to teach about money is by openly talking about the cost of things, what you as a family can and can't afford, how to get good deals, how the family budgets and saves and donates. Being honest with them, including letting them share in money decisions, will go a long way towards teaching responsibility.

3. When they seem ready, start giving them responsibility for an aspect of the family budget that concerns them. Perhaps desserts when eating out, or buying snacks at the grocery store, or toys books and video games, or their clothing. Start with one and build up. Some don't even require that you hand cash to them. (For example, tell the children that they have $5 to purchase snacks each week while shopping. One of the advantages of this is that they are engaged at the grocery store and not constantly interrupting you with requests to buy snacks.) I remember when I put my teen in charge of his clothing spending and he started getting almost twice the clothes with the same amount of money.

4. Gift money is the best way to get them to save, donate, and spend. And then later the money they earn working for other people.

JMO

I have pondered some of this myself. Since I don't have any experience with allowances and how it affects kids, I am wondering if anybody else has had negative results from giving an allowance for doing chores they would need to do anyway?

I appreciate the info. Not sure I would do all of what you listed, but I will take it into consideration. Sharing some of the budget that concerns them when they are older might be a good thing. Right now, they just tell everybody everything. I was starting to teach about checkbook ledgers last night, and I had a fake "paycheck" for them to enter and then random expenses. In the middle of it my son (9) asks what I make a year. Hah...not telling him. He will tell everybody.

[Outdoorsygal]

1. Never pay a kid for doing chores or responsibilities. You don't charge them when you cook dinner or wash clothes and they shouldn't be paid to make beds, do homework, or even babysit siblings. Families are not businesses.

Earning money from chores doesn't make your family a business. What in the world?

2. The best way to teach about money is by openly talking about the cost of things, what you as a family can and can't afford, how to get good deals, how the family budgets and saves and donates.

I disagree. What I can afford isn't necessarily my 10 year old sons business.I agree with talking about money, educating them though. But just because I can afford more than $15 a week doesn't mean he is getting that. Nor does it mean he does chores like everyone ....and I just decide to give him $15 a week so our family isn't designated a business. We gave gifts of money and stuff + his money earned because parents are suppose to do this. It's what parents do. BUt...We also paid for him doing his chores. He is a 10 yr old child,he is not obligated to run the house, cook clean but he should be preparing for that adult role as he grows up.

Being honest with them, including letting them share in money decisions, will go a long way towards teaching responsibility.

Yes that too. But it's not an either/ or as you've stated. There are these millions of families who teach their children the value of money and budgeting by giving an allowance. They are equally a family just as any other family. I don't agree being honest is necessarily the best policy. Some things are not the child's business as my BIL says. He would never tell his 10 year old son that he is worth 80 million dollars. He would hide magazines from the Chamber and anything else that tipped him off of their wealth. Slowly we can help them learn adult finances, they do not need to be enmeshed in our OWN personal finances necessarily. Teach them to create their own finances.

3. When they seem ready, start giving them responsibility for an aspect of the family budget that concerns them.

Um, No. Again, My BIL is the wealthiest person in our adjacent county due to a few inventions. I cannot see why sharing his enormous family budget and those decisions with my nephew. When they were dirt poor (my FIL fronted the money for his first invention) they WOULD NOT have let their son on how poor they really were.

Adults run the family budget but sure, finances can be discussed but it is not an absolute as you've stated above. Especially for a 10 year old.

Perhaps desserts when eating out, or buying snacks at the grocery store, or toys books and video games, or their clothing. Start with one and build up.

One snack and build up?? Why? If the snacks are healthy, why build up?

We stop by and get healthy snacks regularly before our family bike rides, always have. I would never dream of having him build up to obtaining a snack??

Some don't even require that you hand cash to them. (For example, tell the children that they have $5 to purchase snacks each week while shopping. One of the advantages of this is that they are engaged at the grocery store and not constantly interrupting you with requests to buy snacks.)

Food is what we provide our children, it is the law. We do not need to limit it via a cash dollar value. The focus when shopping needs to be on buying healthy food. Of course if it is too expensive, then that decision can be made to pass on that item. Maybe make it homemade at home, or wait for a sale.

I remember when I put my teen in charge of his clothing spending and he started getting almost twice the clothes with the same amount of money.

Perfect. You are providing his needs via cash and he is learning how to spend that money to the fullest while having those decisions himself of how to dress. Wonderful

4. Gift money is the best way to get them to save, donate, and spend. And then later the money they earn working for other people.

Gifts are great but there is no reason why they cannot learn to work for their parents in preparation for working for other people. Your statement is very odd. My 10 year old was selling on EBAY because I showed him how. I still sell on ebay to this day.

He had his own ebay account. He sold Pokemon and stuff I had no clue about. Now he works for Apple. Not that he uses any of those skills but he didn't turn out bad because his mother allowed him to earn money working for her or working for himself, essentially, at 10 years old. He knew the price of kids toys, made consistent quick money each month.
So there are no absolutes that they cannot learn how to earn money from their parents prior to working for others making this family now, into a business. Also some families do work together within the family business, and that's fine too.

The only thing I feel strongly about... is parents who buy themselves extragavent gifts and barely give their children any spending money. It belittles them. That is what I wanted to avoid with our son. Sometimes he didn't get money as a child because we simply couldn't afford what he wanted to buy. But would have purchased it if we could have. Such as a quality bicycle.

[GoodSteward]

Earning money from chores doesn't make your family a business. What in the world?

I disagree. What I can afford isn't necessarily my 10 year old sons business.I agree with talking about money, educating them though. But just because I can afford more than $15 a week doesn't mean he is getting that. Nor does it mean he does chores like everyone ....and I just decide to give him $15 a week so our family isn't designated a business. We gave gifts of money and stuff + his money earned because parents are suppose to do this. It's what parents do. BUt...We also paid for him doing his chores. He is a 10 yr old child,he is not obligated to run the house, cook clean but he should be preparing for that adult role as he grows up.

Yes that too. But it's not an either/ or as you've stated. There are these millions of families who teach their children the value of money and budgeting by giving an allowance. They are equally a family just as any other family. I don't agree being honest is necessarily the best policy. Some things are not the child's business as my BIL says. He would never tell his 10 year old son that he is worth 80 million dollars. He would hide magazines from the Chamber and anything else that tipped him off of their wealth. Slowly we can help them learn adult finances, they do not need to be enmeshed in our OWN personal finances necessarily. Teach them to create their own finances.

Um, No. Again, My BIL is the wealthiest person in our adjacent county due to a few inventions. I cannot see why sharing his enormous family budget and those decisions with my nephew. When they were dirt poor (my FIL fronted the money for his first invention) they WOULD NOT have let their son on how poor they really were.

Adults run the family budget but sure, finances can be discussed but it is not an absolute as you've stated above. Especially for a 10 year old.


One snack and build up?? Why? If the snacks are healthy, why build up?

We stop by and get healthy snacks regularly before our family bike rides, always have. I would never dream of having him build up to obtaining a snack??


Food is what we provide our children, it is the law. We do not need to limit it via a cash dollar value. The focus when shopping needs to be on buying healthy food. Of course if it is too expensive, then that decision can be made to pass on that item. Maybe make it homemade at home, or wait for a sale.


Perfect. You are providing his needs via cash and he is learning how to spend that money to the fullest while having those decisions himself of how to dress. Wonderful


Gifts are great but there is no reason why they cannot learn to work for their parents in preparation for working for other people. Your statement is very odd. My 10 year old was selling on EBAY because I showed him how. I still sell on ebay to this day.

He had his own ebay account. He sold Pokemon and stuff I had no clue about. Now he works for Apple. Not that he uses any of those skills but he didn't turn out bad because his mother allowed him to earn money working for her or working for himself, essentially, at 10 years old. He knew the price of kids toys, made consistent quick money each month.
So there are no absolutes that they cannot learn how to earn money from their parents prior to working for others making this family now, into a business. Also some families do work together within the family business, and that's fine too.

The only thing I feel strongly about... is parents who buy themselves extragavent gifts and barely give their children any spending money. It belittles them. That is what I wanted to avoid with our son. Sometimes he didn't get money as a child because we simply couldn't afford what he wanted to buy. But would have purchased it if we could have. Such as a quality bicycle.

Ok so I wasn't the only one who reacted this way. I was just trying to respond politely, but this is how I felt. hahaha

[Outdoorsygal]

Ok so I wasn't the only one who reacted this way. I was just trying to respond politely, but this is how I felt. hahaha

Sounds like I might need to do some editing but I gotta run to do an 18+ hr shift until tomorrow morning. We have internet at work but not sure when I can slip it in.

[creditcardfree]

Just chiming in that my girls got their prepaid debit card around 10. They didn't use it much honestly, but they few times they did was a good experience. Oldest daughter (sophomore in college) has a checking account and debit card. We give her $100 for incidentals each month. Her younger sister gets $16 a month (that's how old she is). We give allowance to buy wants, and we have kept it low (again, based on age) to encourage saving for the big things, and to encourage working for money.

I do wish we taught them the experience of interest, but I talk about it with some regularity so they get the idea at least.