Teaching Kids Dollars & Sense

There’s a good article today in Today’s Parent magazine called Task Force: Chores. It’s a useful reminder that “doing chores” starting at a young age isn’t just about getting chores done…..it’s about developing your children’s sense of responsibility and contribution that will help them become successful adults. Well worth a brief read.

It’s so nice to unexpectedly find unsolicited praise during some aimless browsing

I just came across Dave Mauder’s blog entry where he talks about his headstrong 19 year old daughter. She was moving out that day, following a long history of financial irresponsibility and non-contribution to the family. It’s a difficult situation for any parent, but unfortunately, not at all abnormal. Dave’s article (lament?) is required reading, IMHO.

Half way through the story, much to my surprise, I discovered a huge and lengthy plug for Active Allowance!

In Dave’s words:

“I truly wish I would have known about this service back when my kids were 5 or 6 years old. What a difference it could (would) have made!”

We often do wish we could turn back the clock. Dave - my main consoling comment on the subject comes from my Dad:

“Just remember….life’s a marathon, not a sprint….there’s still a long way to go in this race!”

Dave - please be sure to give us an update on how she’s doing and any useful learning you might gain.

And if anyone reading this has kids in the 6-15 age range, check out our free trial. We can’t guarantee you’ll avoid Dave’s situation but it will sure give you a big leg up!

I wish we had done this ages ago!

We took advantage several weeks ago of a free service from our bank (TD). We created child bank accounts for each of our teens (14 and 17) and gave them debit cards to access them.

Now, when they want money from their virtual family bank account at Active Allowance:

1. they write us a check from their Active Allowance account.
2. if it’s for more than just a small amount of cash, we log in to our real bank account with TD and do a transfer to theirs.

Quick and simple!

Now, they can pay retailers using their debit cards and not worry about losing their cash or being overdrawn.

I wish we had done that years ago for our 17 year old so she wouldn’t have had to carry so much cash when she went shopping (and sometimes lose it!).

Here’s a list of some of the main benefits:

• No need for older kids to carry a lot of cash when shopping
• No ability to overdraw/borrow
• No charge to get the debit card
• No charge to use it in stores
• No charge for ATM access, if from our bank’s ATM’s
• No need for us to have cash on hand when the kids want it
• Easy to immediately transfer money online from our account to theirs
• Online transfer safely relies on the bank’s mega-million dollar investment in online security
• transfers are free

All free for child accounts (free at our bank - yours may differ)! The only limitation for our bank’s debit card vs a credit card is their debit card doesn’t enable you to buy things online (some banks’ debit cards do work online).

Despite this one infrequent limitation, we vastly prefer debit cards over credit cards for our kids. One of the principles we’re trying to teach them, while we still have some influence, is that they “shouldn’t spend it unless they have it”. And that’s sure hard to do when they have a credit card (especially when I see how undisciplined our daughter can be with her cell phone account! I wish our cell phone company enabled us to create a limit, but that’s a rant for another day).

Oh….and one more thing…..it looks like some of our Teaching Kids Dollars & Sense lessons might be sinking in…at least with our 14 year old son! He deliberately doesn’t transfer too much into his real bank account. He’s a little concerned that if it’s too easily available to him, he might just spend it!

Sometimes, we wonder what lessons might be sinking in. It’s soooooo nice to enjoy those moments when we see some do!

Oh….and did I mention it’s all free

There’s a good chance you have already seen this but I have a great laugh every time I do. It’s scary just how many times I say these very same things. Oh well….at least the Active Allowance process and our kids’ Responsibility Checklists help me cut down the number!

Here it is - The Mom Song sung by Anita Renfroe to the tune of The William Tell Overture.

Ahhhh….the never-ending debate about whether allowance should be linked to chores. Here’s a thoughtful blog entry by Dave Taylor, who publishes Attachment Parenting Blog: Raising Children with Love.

Dave raises some great points to consider for parents who feel their kids should contribute to the running of the home just because they “should” (the “I don’t get paid for doing dishes” crowd).

What do YOU think?

From our mailbag…

From time to time, we receive emails from members who tell us about their experience with Active Allowance. We received this one yesterday:

Dear Leslie and Harvey,

Our family has been using Active Allowance for 2 months now, and things are going so well that I’ve been talking about your program constantly - at work, with family, with friends…

One of my friends has a blended family with 5 kids ranging in ages from 15 to 2-1/2. Consistency and accountability is always an issue in their house because of fluctuating visitation schedules, and my friend is hoping that Active Allowance will be their answer. I spent two hours with her last night helping her with setting up the checklists and budgets - they get started tomorrow (Monday). Even the 2-1/2 year old has a checklist of his own so he can be a part of it, too!

The difference in my household is amazing - we rarely have to remind the kids of their responsibilities anymore, and they get after me every Sunday evening to get their new lists printed out for Monday morning.

I recently had a day out with my 11-year old son, and he’d taken some of his “Fun Money” with him to spend. At one point, he was debating between buying two different items - finally putting them both back on the shelf. He said, “Mom, I can’t decide, so I guess I won’t buy either one.” No pouting or disappointment, just the realization that he didn’t want either thing bad enough to spend his hard-earned money on. And this was my “spender” - money used to burn a hole in his pocket.

Before Active Allowance, I probably would have bought one or both of the things for him - so I saved, too! Thank you, thank you, thank you!

Michelle

Well you made my day! It’s results like yours that make this so much fun and rewarding for all of us here at Active Allowance, and especially for Harvey and me! Thanks so much for sharing how things are going. And double thanks for passing on the good word!

Leslie

Here’s a good read from Money Magazine: Help! Our kids are driving us broke. The Millers are concerned about how much they’re spending on their kids, not to mention on their own indulgences — and how much their kids are still demanding. If you’re a member of Active Allowance, you’ll probably remember this scenario and have some sympathy for the Millers. Now if only they knew about our service!

OK……exulting here. I know it’s a breeze for web design firms to do something like this, or maybe most 20 somethings, but ….. me?

Leslie and I wanted to create an easy to follow “Setup and Process” video for our Chores and Allowance System and put it in our Help Guide for new members, but do it without breaking the bank. Here’s the result (a small size version):

Ahhhh, tres satisfying. Yes, I know. We could undoubtedly do a better job with pro talent …. and Leslie winces whenever she sees it and wants to do a reshoot …. blah, blah, blah ….. but not bad for a first effort, huh?!

Full disclosure - I’ve become pretty good over the past year with end-user software (praised be Apple for their Macs) but I am not an HTML/CSS/Javascript writing techie. That stuff’s for our Development team. If you’re interested in what tools I used to do this, let me know. You could probably do it too.

Still exulting here

In my previous career, I learned that I could do a presentation for five people in a room and have them walk away with five different misinterpretations of what I said. A few key conclusions:

1. OK. Let’s deal with the obvious first. There’s, uhhhh, something, errrr, wrong with my, ahem, communication skills.
   
   And now on to something more useful for you.
2. Repeat with a twist: It’s very useful to repeat a concept, but do it in a different way. You never know what might achieve the “Ah-hah!”. With that in mind, here’s a terrific summary of key lessons to teach your children about money by Leo at Zenhabits. Although I don’t know Leo, he’s obviously traveled down the same road as Leslie and me. Many of the ideas he conveys are identical to what we incorporate into Active Allowance. But perhaps he says it in a different way, so you might get a new Ah-hah today. It’s sure worth a good read!
3. Just because you said it, doesn’t mean they get it: Words are often not a very effective way to communicate. But until we can do mind-melds, we need to find multiple ways to teach our kids. That’s why it’s so important to have your kids learn by doing - a far more effective instructor of life lessons.

As a minor quibble with Leo’s post, I disagree with the black and white position he takes in #8 on what’s appropriate for how your children earn money (eg types of chores). In his defence, this issue is a big one, and it’s hard to do justice to it in a paragraph.

Nevertheless, there are at least two sides to that debate. I often liken it to politics and religion. People may have strong points of view, and arguments are often heated and sanctimonious on both sides. But in my mind, neither is right or wrong - it comes down to personal preferences, beliefs, attitudes, philosophies. I have my own strong point of view, but I accept the fact that others vote for different people (ok, I call them names, but I’ll fight for their right, yada yada).

With that caveat, Leo’s post is a great read

There’s a Children’s Chore carnival going on today at “Don’t Try This at Home”. Many bloggers are contributing their ideas to the age-old issue of kids’ chores. Here’s some personal learning and preferences from more than 3 years using our system with our 4 kids and discussing this with a great many Active Allowance members. I’ve tried to distill a ton of stuff down to just a few core thoughts…..really!….this is the pared back version! First, some key underlying principles, then the high level mechanics of how it works.

We’re a team

I love teaching our kids that we’re a team and we each have a role to play in making the family unit successful (fill in your personal definition of “successful” here). Mum and/or Dad may be the ones whose role is to earn income externally, and the kids’ primary role is to go to school and learn. However, there are many areas where the kids can share in the family effort and therefore earn their share in the family income.

Responsibilities, not chores

I see chores in a broader role - that’s why I instead prefer to call them Responsibilities. It’s not just about getting jobs done - it’s about the kids’ role in helping the family run better in an age appropriate manner. For younger kids, that might include lowering the family temperature in the morning by being ready for carpool with no nagging. For older kids, it might be more traditional chores like walking the dog.

Shoulds, wants and realities

We want our kids to help around the house because of their keen sense of appreciation for what we do for them…..they should do it because of their responsibility as a citizen of the home…..and because of a range of other intrinsic motivations…..but kids will be kids. Socialism is a warm, wonderful “wish” too, but it also doesn’t work in reality.

Behavior normally follows Attitude - you feel a certain way so you behave accordingly. But how do you create change? Dale Carnegie teaches something that seems counter-intuitive - that Attitude can follow Behavior. If you “Act enthusiastic (a behavior), you’ll be enthusiastic (an attitude)”. The idea is that if you want to feel a certain way, try changing your behavior - it’s a lot easier to change behavior than it is to change attitude…..and that a changed attitude will follow.

With Responsibilities linked to Allowance and perhaps other rewards, we may initially be working on the behavior part, but we can see in our children that with consistency and constant reinforcement, it’s showing up in our their attitudes as well (admittedly after several years).

Connecting Responsibilities and Allowance

This is a super-charged issue - experts and parents are hotly divided (and often sanctimonious) on whether allowance should be linked to completion of chores. (more…)