Kids.  And money.  Never the twain shall meet.

Ha ha ha ha ha.  Just kidding.

BrightSide works in finances, so he’s super serious about people appreciating all aspects of their fiscal circumstances.  This would include understanding assets, expenses, and making responsible spending decisions.  The kids’ ages do not exempt them from this condition; rather, it’s because of their ages that we want them to start learning about money now.

With kids and money came a bevy of decisions to make:  How much is reasonable for their ages? How often should they get it?  Should the money be tied to their chores or should it be separate, used solely for teaching money skills?

All good questions, these.

So we established a system with the kids.  Chores are a household responsibility — you live here, you contribute to the mess, therefore you assist in maintaining the household.  They are nonnegotiable, and opting out of your work equals opting out of your fun time, too.

That left instituting a system for allowances.

They each have three containers in their rooms — Saving, Spending, and Donation — and when they receive their allowance each month they split the cash between the jars.  We explained that their Savings jar is for when they leave home; it’s really cute to see them watch this amount grow and talk about how when they go to college they’ll have money to take someone on a date.

We’ve encouraged them to save their money for donations and then choose an organization or cause at least once or twice a year.  At first they expressed an interest in donating to the local animal shelter, which I thought was a wonderful idea, but when push came to shove I was extremely nervous about walking in there with these two kids.  Every time I’ve ever walked into an animal shelter, I’ve come home with a dog.  Who knows what would happen if Bear and I walked into one together?! And BrightSide has flat out told me that he does not want to come home one day to find a third dog living here.  So, the pet shelter idea was put on hold for now.

As for their Spending jar, that money is theirs to do with as they choose.  It’s been interesting to watch their attitude about this cash change over time.  At first, they couldn’t wait to take their money to the store for candy or toys, but eventually they figured out that by saving up they could buy things that they really wanted even if they cost a little more.  We’ll talk with them about making responsible choices, weighing cost versus benefit, or whether something is really worth the money the store is charging, but in the end the decision about spending that cash is their own.

They’ve learned a number of things from their purchases.  Sometimes they still decide it’s worth it to blow a few bucks on candy, and I can’t disagree that occasionally a sweet craving is worth the money.  Seeing Bear’s pride the time she could “treat” her brother to lunch at Chic-fil-A with a gift card was charming.  When T-man received a Dick’s gift card for his birthday one year we spent an hour and a half shopping, comparing prices on socks and shirts, looking for combinations that matched his budget, discussing whether he’d rather put together an outfit or buy several pairs of socks (again, with those Nike Elite socks!!), determining the tax…by the end of it I was exhausted, but he was so proud of the outfit “he’d” bought.

Some lessons have been a bit heartbreaking.  T-man had part of an Amazon gift card left from Christmas and was shopping online with his friend for skateboarding items; he found a used ramp with rails that he wanted to buy, but since it was more than his gift card balance he had to discuss paying BrightSide and me the amount that would drop onto our credit card.  I talked with him a lot about the decision, but since they make their own spending choices I didn’t research it myself on Amazon.  He decides it’s a go, orders it, then practically vibrates in place for days while he waited for its arrival.

The day of delivery I thought I would lose my ever-loving mind if he asked one more time if the ramp had come yet.  It hadn’t arrived by the time we left for tae kwon do, but when we pulled back up to the house there was a box on the porch and oh-my-word, you’d think he’d won the lottery.  He and Bear took the box to the garage while I started dinner, and the next thing I knew things were falling to pieces out there.  It turned out that T-man had actually only bought the rails, not the ramp like he’d believed, and it was nothing short of traumatizing.

I waited a day before I talked with him about how he’d gotten so confused.  It turned out he’d paid more attention to the picture (which, of course, included the ramp that could be used with the rails) than to the product description itself.  A good lesson in paying attention to details and reading carefully before you buy.  A very sad lesson in the overwhelming disappointment when the thing you’ve dreamed about for three days isn’t coming after all.

So this is our banking system.  The kids seem to be learning a lot of the basics, though I know eventually BrightSide will want to move on to investments and such.  He’s already expressed interest in trying something that he did as a child: his parents would give BS and his sister a weekly food budget, allowing them to shop for and pack their own lunches.  This helped them learn everything from shopping within a budget to taking advantage of sales to the cost/benefit analysis of including special treats in their lunches.  BrightSide and his sister were allowed to keep any money they didn’t spend on lunch supplies, so they had a great incentive for carefully thinking through their choices.

BS has mentioned instituting this system with our own kids.  I definitely see the educational value of it, but truthfully the thought of implementing it is exhausting.  The reality is that making this happen would fall on me.  I buy groceries while they’re at school, so this would mean a separate shopping trip when the two of them are available to go.  They would have to work out how much they can afford per day, what they can buy within that budget, how price fluctuations at the store might affect their buying decisions, and how to be flexible with their money.  All of that is going to take some serious adult supervision.

One of these days I’m going to have to put on my Big Girl Panties, suck it up, and add this project as part of their financial education.  They’ve learned a lot so far, but we still have a long way to go.

The bottom line?  BrightSide and I make tons of little decisions every day that add up to create big change in our lives.  That’s a life lesson that can take far too long to understand.  We’d love to send the kids out into the world as prepared as possible for the financial realities they’ll face.