allowance for 9 year old

One thing that I'm trying to do is to use cash more and my credit cards
less, because while we use credit cards as charge cards, paying them in full
each month (DH likes having the record of purchases), regularly doing so
means that DD doesn't get to see trading money for goods more directly, and
doesn't get to see the order of magnitude between a $7 McDonalds visit and a
$120 grocery store trip.

At age 3, the other thing we do is that she has her own bank and her own
purse. She gets money occasionally as a gift from relatives, and she also
gets 4 quarters a week, which she can then spend on the carousel at the
mall, the jelly bean machine at the mall, or at dollar tree. She also can
claim any change she finds lying around for her bank (DH is very bad at
that-and since it clogs the vacuum cleaner, I'm not at all adverse to DD
locating it and picking it up for me), and she knows that a quarter goes in
the collection box at Sunday school each week (which stays in a special
pocket in her purse so she doesn't spend her "Jesus Money")

She loves collecting change in her bank and sorting it (she knows that coins
are different, but I don't think she quite has the concept that pennies and
quarters are worth different amounts-but she KNOWS quarters are the ones
that go in those neat machines).

If her purse is empty, that's it, she can't spend any more money.

It's very simple money management, on a 3 yr old level, and when she's
better with amounts, we'll move to something more involved. For now, her
choosing whether she wants to spend the money on jellybeans now or get a
dinosaur next time we go to Dollar Tree is about as much as she can handle
(and I try to avoid making such trips unless I know she has enough money to
buy an item).

My parents did the budgeting thing with me, and made me responsible pretty
much for everything-the biggest being my music lessons and school lunch,
plus a supplement each year for clothing and school supplies. I know my
friends thought I had a huge allowance, and I was one of the first in my
peer group to have a checking account and bank card, but actually I probably
had less spending money then they did, but this wasn't until I was maybe
middle school aged?

My 9 year old step-son has no concept of money and thinks my ATM card
provides an endless supply of cash whenever I need it. When he asks
for something I tell him I can't afford it, his response is, "well
just use your card." When he gets money of his own, he immediately
wants to go wherever anyone will take him, be it the dollar store,
7-11, even the grocery store, just so he can spend it. He ends up
missing out on bigger ticket items he wants because he's not able to
hold onto his cash for more than a day or two.

Anyway, obviously I think some changes need to be made and I'm hoping
an allowance will help. He already does a number of chores around the
house and doesn't currently get any financial payoff for them.

So my questions a

What is an appropriate allowance amount for an almost 10 year old?

What do your kids use their allowance $$ for? Are there certain
things they're responsible for buying or can they use the money for
whatever they want? I'd like to open a savings account for him and
make him save a certain %... but I'm not sure what % would be "fair."

Thanks for your input.

Kim

Kim wrote:
My 9 year old step-son has no concept of money and thinks my ATM card
provides an endless supply of cash whenever I need it.

Well, it does, doesn't it?

When he asks
for something I tell him I can't afford it, his response is, "well
just use your card." When he gets money of his own, he immediately
wants to go wherever anyone will take him, be it the dollar store,
7-11, even the grocery store, just so he can spend it.

There is something wrong going on. Does he think someone will steal it?

Does he see you spending money writing checks, balancing the budget and
saving?

He ends up
missing out on bigger ticket items he wants because he's not able to
hold onto his cash for more than a day or two.

Anyway, obviously I think some changes need to be made and I'm hoping
an allowance will help. He already does a number of chores around the
house and doesn't currently get any financial payoff for them.

Nor should he. Does he get heat, water, food, a roof? That is his payoff.

However, an allowance sounds like it is indicated, along with forced
savings.

So my questions a

What is an appropriate allowance amount for an almost 10 year old?

Depends on your financial status. What do other parents give in the
community?

What do your kids use their allowance $$ for?

They should be using it for savings, giving some for charity (say 10%),
and some for spending money.

Are there certain
things they're responsible for buying or can they use the money for
whatever they want?

When school starts in the fall, it might be appropriate to say, "Here's
$300 or whatever the budget is. You need to buy your shoes, pants,
shirts. You can spend it on a few items or get items at a discount and
have more items."

I'd like to open a savings account for him and
make him save a certain %... but I'm not sure what % would be "fair."

Start with 50%. You can always change later. And I think giving back to
the community (i.e., charity) both with talent (i.e., time and effort)
and money is appropriate.

Thanks for your input.

Kim

In article
,
Kim wrote:

What do your kids use their allowance $$ for? Are there certain
things they're responsible for buying or can they use the money for
whatever they want? I'd like to open a savings account for him and
make him save a certain %... but I'm not sure what % would be "fair."

People do these things in different ways.

Firstly, he's old enough to be taught the difference between a debit card and
a credit card, and to see (if not actually calculate) the difference between
paying for something outright and paying on the never-never. He's certainly
old enough to understand that your ATM card is not magic, and that the $$ are
your wages.

Secomndly, as he has a poor understanding of money, I suggest that you take
things slowly. You have a number of goals for him; pick one. Perhaps the
easiest one is for him to "learn the value of money" by giving him a regular
amount of pocket money. It should be set at an amount that is (a) manageable
for you and (b) enables him, in the course of a few weeks' saving, to buy
something he wants (like a small lego kit, for example).

IMHO household tasks should not be paid for. Children will not be paid to
wash their own dishes or take out their own rubbish as adults; those things
have to be done anyway. Besides -- what if your child's desire for cash is
exceeded by his desire to avoid housework?

My 2c,

--
Chookie -- Sydney, Australia
(Replace "foulspambegone" with "optushome" to reply)

http://chookiesbackyard.blogspot.com/

Hi --

Another thing you can do to start giving him a sense of money is to
regularly discuss relative values with him. For example, show him a $1
bill. Take him with you to the grocery store and find out what things
you can buy with it. Show him a $10 bill. Go to a store (online is
fine, too) and find out what you can buy with it. Then discuss how much
money people earn for different jobs. For example, a checker at the
grocery store makes $X per hour, so how many hours does he have to work
to earn enough to eat dinner?

My son's 5th grade class had a great project where they had to try to
spend 1 million dollars. They had circulars from the newspaper,
catalogs that had come in the mail, etc. They had to rent, not own, a
home and were allowed to 'buy' a car for undeer $20K. They couldn't
purchase any single item for over, I think, $5K other than the car. The
end result was a good sense of how much a million is, and a better sense
of the value of money.

You could also have your son help budget household purchases, meals,
etc. Be sure to translate into HOURS it takes to earn different amounts
of money.

Do you guys play Monopoly or Life? They also introduce the concept of
spending money wisely.

I hope these ideas help,
--Beth Kevles
-THE-COM-HERE
http://web.mit.edu/kevles/www/nomilk.html -- a page for the milk-allergic
Disclaimer: Nothing in this message should be construed as medical
advice. Please consult with your own medical practicioner.

NOTE: No email is read at my MIT address. Use the GMAIL one if you would
like me to reply.

On Jan 22, 2:00 am, Jeff wrote:
Kim wrote:
My 9 year old step-son has no concept of money and thinks my ATM card
provides an endless supply of cash whenever I need it.

Well, it does, doesn't it?

When he asks
for something I tell him I can't afford it, his response is, "well
just use your card." When he gets money of his own, he immediately
wants to go wherever anyone will take him, be it the dollar store,
7-11, even the grocery store, just so he can spend it.

There is something wrong going on. Does he think someone will steal it?

I had to comment on this -- I don't think the OP's son is different
than most kids (nor most people) in a desire for immediate
gratification. I wouldn't label this behavior as 'something wrong' --
I'll agree it's not a great behavior, but I can't see some sort of
weird ulterior fear or motive here.

Caledonia

"Kim" wrote in message
...
My 9 year old step-son has no concept of money and thinks my ATM card
provides an endless supply of cash whenever I need it. When he asks
for something I tell him I can't afford it, his response is, "well
just use your card." When he gets money of his own, he immediately
wants to go wherever anyone will take him, be it the dollar store,
7-11, even the grocery store, just so he can spend it. He ends up
missing out on bigger ticket items he wants because he's not able to
hold onto his cash for more than a day or two.

LOL my children thought you went to the shop to buy money because I usually
got cashback rather than getting it from a bank.

Anyway, obviously I think some changes need to be made and I'm hoping
an allowance will help. He already does a number of chores around the
house and doesn't currently get any financial payoff for them.

So my questions a

What is an appropriate allowance amount for an almost 10 year old?

What do your kids use their allowance $$ for? Are there certain
things they're responsible for buying or can they use the money for
whatever they want? I'd like to open a savings account for him and
make him save a certain %... but I'm not sure what % would be "fair."
#1 (is 7yo) and gets 50p a week. She's meant to pay about half of all family
presents. If she has a good idea and it's more than she can afford I'll
usually reduce it down to what she can afford. She's usually paying about £1
per present.
She spends most of the rest of her pocket money on other people. We'll go to
the shops and she'll see something she wants to get for a friend and use her
pocket money for that. She spent 4 months summer before last putting all her
pocket money into a collecting box for Guide dogs for the Blind.
She bought herself a pair of earrings just after she'd had them pierced. She
has bought a boock or two. Basically she saves it in her purse until she
sees something she wants then spends it. She initially wanted to buy sweets,
but luckily grew out of that quickly.
Debbie

Kim wrote:
My 9 year old step-son has no concept of money and thinks my ATM card
provides an endless supply of cash whenever I need it. When he asks
for something I tell him I can't afford it, his response is, "well
just use your card."

Well, to be fair, if he hasn't really been taught about
money, it's easy to see why he would think that way.

When he gets money of his own, he immediately
wants to go wherever anyone will take him, be it the dollar store,
7-11, even the grocery store, just so he can spend it. He ends up
missing out on bigger ticket items he wants because he's not able to
hold onto his cash for more than a day or two.

Again, for some kids these are skills that really need
to be deliberately taught. You'll need to be willing to let him
make some mistakes (and not bail him out by getting the big
ticket item for him).

Anyway, obviously I think some changes need to be made and I'm hoping
an allowance will help. He already does a number of chores around the
house and doesn't currently get any financial payoff for them.

So my questions a

What is an appropriate allowance amount for an almost 10 year old?

I think you have to set this based on what he's required
to spend his own money on.

What do your kids use their allowance $$ for? Are there certain
things they're responsible for buying or can they use the money for
whatever they want?

I think either way is fine, as long as you're very clear
and very consistent. Some people have the child pay for all their
regular expenses, like clothes and toiletries and gifts for friends/
family, and so on, in addition to their "wants." This can help them
learn to work with a budget, but it also ups the risk level. Are you
willing to let him wear the one remaining pair of pants that fit him day
after day if he screws up and spends all his money and hits a growth
spurt? You'll undo all the good if you're just going to bail him out
whenever he makes a mistake. If you go this route, you need to provide
good support initially on developing a budget.

On the other hand, if his allowance is just for fun,
that's ok too. He can also learn to save and budget, even if
it's just for his wants rather than his needs. But again, you
have to make it meaningful. If he's saving up for something
bigger, then blows it all before he's saved up enough, then
gets the big ticket item next week for his birthday, well,
not much of a lesson learned there. If you've been in the
habit of buying him things, it may be difficult to change your
habits as well.

I'd like to open a savings account for him and
make him save a certain %... but I'm not sure what % would be "fair."

If you want him to save, then you have to set his
allowance to be reasonable based on that. A lot of people
do 30 percent long term savings (e.g., college), 30 percent
short term savings (a bigger ticket item, gifts), 30 percent
spend (for the little "get it now" stuff), and 10 percent
giving (e.g., church, charity, etc.). It's not an unreasonable
plan, but it can be a pain to administer. For example, you
have to dole out the allowance in quantities that can be
divided up 30/30/30/10. You can use play money or a
"checkbook" and you can be his banker, but then of course you
have to set aside his money and get the long term savings
in his savings account or wherever it goes.

All that said, I don't think an allowance is necessarily
the only way to teach responsible money management. If you don't
want to go that route, you can find other ways to do it (although
for some kids it may well be the best and most concrete way).

Best wishes,
Ericka

One of things that is most important is education.

There are several sources I recommend.

First, there are Money magazine and Kiplinger's Simply Money magazine.
And there's Marketplace money on the internet or NPR
(http://marketplace.publicradio.org/). While these are for adults, you
also need to educate yourself. And there are stories about educating
kids. I listen to or read these regularly.

Some things I will say. Some will work for your family, some won't.

1) He should be doing regular chores, like taking out the garbage, doing
his laundry and cleaning his room and there are extra things, like
washing the car or dog, washing the windows, fixing the computer.

You can give him an allowance, tie the allowance to the chores, not give
him an allowance, whatever you think is best.

How much depends on what he is expected to do with it and your financial
circumstances. The important thing here is to make sure the money he
gets is enough for what he is expected to do with it. For example, if
part of what he is supposed to spend his money on is after-school
snacks, he should have enough money for a drink and some pieces of
fruit. If he wants to waste his money on something else or spend it all
at once, that's his problem. He gets no snack after school. And if he is
given enough money for the week, and he spends it all in 1/2 hour, well,
he has food at home. That;s his problem.

One thing you can do is open a savings account for him. In addition, if
he does chores, you or he can put money into a Roth IRA for him. He can
learn about long-term savings and picking proper stocks (like Hershey or
Disney), dividends, and long-term growth. With both a savings account
and an IRA, he can learn about compounding.

He should also learn about the savings plans that you have for your
retirement. He can learn from you.

He should also learn where the money you make goes. For example, you
must pay electric, heating, water, sewerage, credit card, cable,
computer, etc., bills. Let him learn how to balance the budge.

Again, as I pointed out earlier, you're family is probably a lot better
off than many families. Now would be a good time to learn about sharing
his wealth with others, by giving away perhaps 10% of his earnings to
others and by working to help others.

Jeff

On Jan 22, 5:44 am, Chookie wrote:

snip

IMHO household tasks should not be paid for. Children will not be paid to
wash their own dishes or take out their own rubbish as adults; those things
have to be done anyway. Besides -- what if your child's desire for cash is
exceeded by his desire to avoid housework?

If one sibling is willing to pay another (out of his allowance or
outside earnings) to do a chore, I would not object. Children should
learn about the benefits of free trade.