Kids & Money

[DB_Bear]

Hi

Heard a unique idea this week about how to get working age kids to save:

* Kid has to save an agreed amount per pay and prove it to parent (passport book, internet account, whatever).
* Kid is allowed to take some money out to live on/have fun with - just not all
* If kid successfully proves that they have saved agreed amount parent does not charge them board.
* If kid did not save agreed amount for that pay period, has to pay $100 board.
* Amount is bank has to grow - can't cheat and put in on pay day then take it out the next day.

The person who told me this works for a Real Estate Agent. She said it works well. Her daughter is 20 going on 21 and well on her way!

Are there any other ideas out there?

DB Bear

 

[Muz]

Hi,

Our kids are 8 and 9.

We pay our kids so much per job ie 50 cents each time they make their bed, $1 if the help with the housework etc. I keep a tally and at the end of the month half the total earned goes into their bank account (dollarmite) and half they can spend on the endless amount of toys, footy cards etc they want.

They still don't understand why half has to go to the bank when there are so many toys etc that they want to buy but hopefully one day they will!! (saying they are saving for their first rental property just makes them groan)

 

[D.T.]

Hiya,

There is a very similar thread to this one on the general part of the forum. There are some very good responses there, have a read sometime.

Personally, I think matching dollar for dollar (or some other agreed ratio) for their saving / investing is a good idea.

-Regards

Dave

 

[Aceyducey]

Muz,

I appreciate your approach - and we pay our kids to do tasks during renos, such as moving bricks, painting, planting & various other tasks within their abilities & other work-related activities.

However we do NOT and will NEVER pay our kids for doing household chores...cleaning rooms, dishes, cleaning baths & toilets, etc - doing a share of housework is expected in our household as part of your contribution to the running of the household.

My feeling is that if you attach a dollar value rather than having these tasks 'expected' you're creating the wrong attitude and expectation in your children for when they are older & have their own houses to run.

However, I have let our son pay his sister to have her make his bed for him. If he (or his sister) are prepared to pay money for the other to do their share I reckon it's good training for money versus time thinking.

Cheers,

Aceyducey

 

[np2003]

The best way to grow up your kids is to give them a good smack every now and then on the bum if they are bad.

 

[Muz]

Interesting Aceyducey,

Each family will run things differently. I'm trying to give my kids a link between earning money (money is earnt not just for household chores), buying what they want and saving money in the bank.

I take your point about housework being expected and as the kids get older this is something I will phase out but I don't want to give my kids pocket money for doing nothing.

How do your kids earn & save money?

 

[Aceyducey]

How do your kids earn & save money?

As described above.

We do sufficient ongoing reno work & there are enough birthday gifts to keep them liquid atm.

They also get a base allowance paid directly into our personal 'bank' which they can access for mutually agreed purchases.

My kids have an entrepreneurial bent, so the next stage is to work on business planning with them.

Cheers,

Aceyducey

 

[Jimmyjamjars]

My kids have an entrepreneurial bent, so the next stage is to work on business planning with them.

Cheers,

Aceyducey

I appreciate your trying to steer them in the right direction for the future Acey, but just remember to let them be kids while they are young, because they grow up way too fast.
JIM

 

[Aceyducey]

I appreciate your trying to steer them in the right direction for the future Acey, but just remember to let them be kids while they are young, because they grow up way too fast.

It's OK Jim, they have plenty of time right now - and hopefully will get the skills so that they have the time to be kids once they've grown up as well!!!

Cheers,

Aceyducey

 

[sbe]

We do a bit of a mix.

There's certain jobs around the house they have to do, without pay. Things like clean their rooms, the playroom, their toilet (three boys - I ain't touching it !!!), set table etc

Then there's paid jobs, things like mowing lawn, vacuuming & dusting family, cleaning windows etc.

Oh, and weeding. 5c a weed - but only with roots. Never seen kids so good at weeding. My 6yo has been known to rack up near $10.00 in weeds !!!

I figure there's certain responsibility in being in a family, but there's a chance to earn some money too.

We make them save AT LEAST 10%, and gift 10% to church. Usually they save more than 10%.

We match their years savings.

Kinda works....

Especially works when there's something they want...

Cheerio

Simon.

 

[Steve Navra]

Hi All,

I match dollar for dollar whatever my children can save.

They are only allowed to spend the growth on their investments . . . this gets them to focus on the purpose of saving. (ROI)

The greater the base (total saved) obviously the greater the potential return.
I don't have to ask them to do chores . . . they keep inventing jobs to do!!

Ahem . . . "Dad, your car needs a clean . . . $15 for a vac & wash and $20 includes a wax??" (Cheaper than the local car wash)

Accumulated out of such menial jobs and working at Maccas . . . and investing it all in shares (I have matched each $), my 20 year old is about to settle on a property in Hendra.

He has noticed that similar properties are selling for $50k more than his purchase price and so believes he will be able to acquire IP2 by early/mid 2006 and expects on this basis to have 10 IP's by the time he is 30.

Am I robbing my kids of their childhood??
Financial education within the home environment is like a childrens game . . . no different to monopoly or cashflow for kids. (Just in real time)

Whatever I contibute to matching their savings, I am sure I will save in not having to bail them out later in life!

regards,

Steve

 

[Lissy]

As a kid, I know the front garden always got a great weed right before the Royal Melbourne Show....

 

[Alan H]

Hi All,

I match dollar for dollar whatever my children can save.

They are only allowed to spend the growth on their investments . . . this gets them to focus on the purpose of saving. (ROI)

The greater the base (total saved) obviously the greater the potential return.
I don't have to ask them to do chores . . . they keep inventing jobs to do!!

Ahem . . . "Dad, your car needs a clean . . . $15 for a vac & wash and $20 includes a wax??" (Cheaper than the local car wash)

Accumulated out of such menial jobs and working at Maccas . . . and investing it all in shares (I have matched each $), my 20 year old is about to settle on a property in Hendra.

He has noticed that similar properties are selling for $50k more than his purchase price and so believes he will be able to acquire IP2 by early/mid 2006 and expects on this basis to have 10 IP's by the time he is 30.

Am I robbing my kids of their childhood??
Financial education within the home environment is like a childrens game . . . no different to monopoly or cashflow for kids. (Just in real time)

Whatever I contibute to matching their savings, I am sure I will save in not having to bail them out later in life!

regards,

Steve

Hi Steve.

"Am I robbing my kids of their childhood??"

Definitely not! If this is done in a sensitive, supportive way it's got to be a HUGE advantage to them as they get older. I guess as parents, one of the many, many, many.............. challenges we face is we need to get the balance right.

Firstly, congratulations to your son on obtaining his first property. Great!

Ok.......moving ahead 15 years........and I hope I have the same problem

How does say a young Uni student without a regular income obtain a loan to purchase a property?

Do you go for cashflow positive stuff only? Do the parents go guarantor for the loan? Do they simply have a very low LVR? Or is it done with a side order of Cashbonds with the Big Macs?

I'm really not sure how most Lending Institutions respond to this particular demographic.......probably because they're so rare??

 

[Olly]

I match dollar for dollar whatever my children can save.

This approach recently bought a few people I know undone.

Neighbour, (male,) next door has his son on regular weekend visits. Neighbour is seperated and son lives with his Mum and partner. Son wanted a TV in his own room and step Dad promised to match him $ for $.

Son visits Dad (neighbour next door), and the father and son weekends of doing things together became son asking for payment to help mow the lawn, wash the car and boat after going fishing etc etc. All in good fun and Dad knew he was trying to earn money for the TV.

In the meantime, step Dad never realised just how determined and entrepreneurial the son would be and just how much the boy would save (he thought $200.00 max).

Result - Boy has a bedroom measuring about 2m x 2m (bit of exaggeration there by Dad telling the story), containing a bed, wardrobe, dresser and a massive flat screen TV on one wall.

He now wants to buy a laptop - step Dad said 'buy your own'

Olly

 

[geoffw]

Specifications must be exact, otherwise the cost can overrun hugely

 

[Olly]

Not exactly about kids and investing but.............

Saw a story on Current Affair tonight about a boy aged 11 who was earning between $500-$600 a week by charging people in his neighbourhood $1.00 for putting their garbage bins out and putting them back in the morning. He also does recycling bins etc, washes cars and anything else he can turn his hand to.

His garbage bin idea has been so successful he now has 2-3 other boys working for him all earning similar amounts per week. He also keeps an excel spreadsheet on who hasn't paid and who has paid in advance etc.

Such a simple and handy business idea and so cheap for the customers and he's raking it in!! Good on him. He's hit on a winner.

Olly

 

[geoffw]

I saw the story. The boy had done well.

I wasn't sure if it was $500 per week though? I thought that both he and his friend had earned a total of $600 over a period of time. He charged $1 per bin- 600 bins per boy per week might be a big ask.

 

[Jimmyjamjars]

Earning your keep

I always earned my own money as a kid. I got together with my best mate and always went door to door on Saturdays and Sundays doing odd jobs, washing cars, gardening, weeding, mowing, just about anything a kid of our age was capable of. We also, in all the years we did it never named a price. We used to tell people that whatever they could afford was fine, it balanced out, some payed us 50 cents to wash a car, some payed 5 bucks. My parents couldn't really afford pocket money or buy the snazzy things I liked and wanted so I bought them myself. I don't recall my parents ever having to buy me a pushbike or skateboard after the age of about 10. Taught me some good values, respect for money earned not given, having said that, I don't know if I would be comfortable with my son going door to door at the same age as the world is a very different place than it was in 1973. What do other forumites think ??????

 

[Aceyducey]

Yah young jobs.

Great for developing a responsible outlook. Only a century ago kids were expected to contribute much more to the household in labour & financially in most families than they are today - I have no issue with that philosophy - within reason (no mines, powder monkeys, etc)

When pre-teen I wrote lines for classmates & had a car washing business.

Unfortunately my babysitting business (a bit later) flunked - people preferred girls, even though I was a cub instructor & had references from scout leaders to back me up.

Cheers,

Aceyducey

 

[sbe]

I always earned my own money as a kid. I got together with my best mate and always went door to door on Saturdays and Sundays doing odd jobs, washing cars, gardening, weeding, mowing, just about anything a kid of our age was capable of. We also, in all the years we did it never named a price. We used to tell people that whatever they could afford was fine, it balanced out, some payed us 50 cents to wash a car, some payed 5 bucks. My parents couldn't really afford pocket money or buy the snazzy things I liked and wanted so I bought them myself. I don't recall my parents ever having to buy me a pushbike or skateboard after the age of about 10. Taught me some good values, respect for money earned not given, having said that, I don't know if I would be comfortable with my son going door to door at the same age as the world is a very different place than it was in 1973. What do other forumites think ??????

I agree. Did much the same myself too.

Also agree with the last bit. Dunno if I'd like my kids trying the same these days..... the worlds a wee bit different.....

Mind you, our parents probably thought the same too.....