Thursday, November 03, 2011
Learning the value of a dollar
This post was underwritten by BMO Harris Bank, which offers a matching $25 on a new savings account opened for your child through their Helpful Steps for Parents program. Learn more at bmoharris.com/parents.
Two weeks ago, my almost 7 year old daughter gave away all of her money to charity. She'd spent a Saturday afternoon collecting donations for the Girl Scouts food drive, and was so moved by a desire to help the less fortunate, she brought $6--two week's worth of allowance--to Sunday morning Hebrew school for the tzedakah box. When we walked to Walgreens later that week, the sting of her empty wallet hit her. She badgered me to buy her gum, first appealing to my generosity and then promising me I could deduct the cost from her next allowance. No dice.
While Josh and I offer money management advice to our second grader (and we did try to dissuade her from donating all her cash to charity), I believe that the best financial education comes from experience. Having given all her money away two weeks ago, I feel fairly confident she'll balance her desire to give back with her own personal needs (okay, wants) in the future.
I also feel that spending her own money gives my daughter a real investment in her purchases and their value. Z feels like she gets a good bang for her buck when it comes to buying sugarless gum, Scholastic books and nail polish, but her tendency to lose earrings has cooled her desire to save up for another trip to Claire's.
There's also a selfish motive for giving Z an allowance. Because she has her own spending money, I have an automatic out whenever she asks me to buy her crap. All I have to say is "you can spend your allowance on that if you want," or "what a perfect toy to save your money up for." And I have rewarded her for big savings projects. When she wanted a new American Girl doll, I told her that if she could save $50, I'd pay the other half. And she did, putting away her $3 per week allowance and tooth fairy money for months.
Z's allowance, which she started receiving when she was 5--right around the time she learned to count money--comes with strings attached, and I've learned that this is somewhat controversial among parents today. But since my pay comes with the expectation of performance, I am comfortable withholding Z's allowance when she doesn't keep her room in order. She used to get $4 a week, with one dollar tied to violin practice. When she dropped violin, we dropped a dollar. She's since requested a $1 "raise," but hasn't managed to chose a chore she's willing to take on to earn that 25% salary hike.
I was selected for this sponsorship by the Clever Girls Collective. To learn more about BMO Harris Bank, visit their website http://bmoharris.com/parents.