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Everyday Cheapskate: Encouraging a kid-sized financial plan at home

If you’ve been reading this column for long, you know that I am passionate on the subject of kids and money. In addition to the many articles I’ve written, my book, “Raising Financially Confident Kids,” has been revised and updated several times. This subject is obviously important to my readers, too.

Recently, as I was preparing a talk for a local moms group, I got to thinking about some of the questions I have received after explaining the system that we used on our boys, and what I write about in the book. After all, assigning a portion of our family’s resources to our children for them to manage — an amount commensurate with each son’s age, needs and ability — was not normal. And that, I believe, is the point. What’s being taught these days to kids about money — if anything — isn’t working.

I’m sure you have a few questions about our kid-sized financial plan, so let’s take a peek at my kids’ book mailbag.

Dear Mary: Doesn’t this salary program constitute a free handout that will only encourage kids to turn into adults who think they don’t have to work for a living? — Claudia, Utah

Dear Claudia: If you’ve read all the chapters, you know I believe children should do chores and regular work around the house, not for pay but because they are citizens of the family community.

I believe children are their parents’ financial responsibility. While some think that kids need to get outside jobs to pay for things they want, I don’t agree. I believe childhood is a time to learn about life, not to be employed. Kids need to be kids, to participate fully in school and become educated.

We didn’t keep it a secret from our boys that they would be expected to get jobs during the summer after their senior year in high school. They had plenty of notice for when their salaries would end. There were no complaints, no problems. They both got their jobs, we stopped paying salaries, and the transition was seamless. They were pleased because the salaries we were giving them were far less than what they earned on their part-time jobs.

Our salary structure did not allow for a lavish lifestyle. Actually, it taught our boys to be quite frugal — a lifestyle they chose for themselves. The salary we turned over to them was the same money we would have spent on them anyway. This did not constitute a new expense. We simply transferred it from our care into theirs.

Dear Mary: I think it’s too risky to give my son this kind of latitude. What if he takes all his money and buys cigarettes with it or worse? — Bill, Texas

Dear Bill: If that is your worry, you have something other than a salary problem. Putting your kids on this kind of salary or an allowance program isn’t going to create rebellious behavior. If that behavior is already in place, you need to deal with it before proceeding with this kind of plan. (Excerpted with permission from Chapter 16 of “Raising Financially Confident Kids” by Mary Hunt; Revell, 2012)

Do you have a question for Mary? Email her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630. Mary Hunt is the founder of www.DebtProof

Living.com, a personal finance member website and the author of “7 Money Rules for Life,” released in 2012. To find out more about Mary, please visit the Creators Syndicate Web page at www.creators.com.

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