Teaching Kids Dollars & Sense

So I think this is a good thing but I’ll let you decide. Rich Boy

Our 13 year old is a great saver, diligent about doing his chores and fulfilling his responsibilities, and even remembers to check things off on his Active Allowance checklists. As a result, he usually earns his entire allowance and often earns bonuses. And when he babysits, he asks us to put it into his big ticket item account so he wouldn’t be tempted to spend it on movies. This summer, he finally bought that big ticket item - an electric guitar.

End of story, great lesson learned, right? Well….right, but there’s more to the story…..

Poor Boy

Our 11 year old is also pretty diligent about his chores and responsibilities. But as soon as he has some money in his Family Bank Account (note for non-members: it’s on Active Allowance), it manages to burn a hole in his pocket. And to make matters worse, he hates filling out the checklist….so he hasn’t been doing it. And therefore earns no allowance. He still does his chores - he knows there will be non-allowance consequences if he doesn’t. But he just doesn’t fill out the checklist (go figure!).

We’ve hung tough, so when he wants to buy something, our simple answer is “Do you have the money?”.

The Drama

Last week, Poor Boy came downstairs with a few gift cards in his hands - he’d previously received some as gifts and some as prizes for winning squash tournaments. He asked me if I’d “buy” them from him. I smiled, told him I’d buy the one from an electronics store since we needed a new DVD player. But not the one from the music store.

So he went to 13 year old Rich Boy to see if he had a buyer. No dice. Then a brain wave. “I know you want to buy a DVD of a rock concert. I’ll sell you a $25 card for $20.”

That was brilliant! Necessity - the mother of invention. He managed to figure out on his own some basic principles of economics, use his salesmanship and demonstrate resourcefulness. I’m not quite ready to put this on his college application, but not bad!

The Learning

Rich Boy said yes. And now Poor Boy has $20 cash instead of an unwanted gift card. Rich Boy learned cash is king. Poor Boy learned about market principles. Both of them won.

And we learned again that sticking with our Allowance and Responsibilities process and making it part of everyday life teaches the kids important lessons - even when it’s not initially apparent.

Mind you, now that Poor Boy has sold off his “assets, I sure hope he gets into “earning” mode real soon! Stay tuned for future episodes in the ongoing saga.

This entry was posted on Tuesday, August 21st, 2007 at 11:54 am and is filed under Active Allowance Tips, Allowance & Chores. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.