I have always appreciated the value of a dollar and as a parent of three boys I was very concerned on how to best teach them to maximize their dollar potential. While the boys were young allowances were simple and were mostly to give the lads some spending money. Each child had his own habits. One saved more than the others and one couldn't spend his money fast enough. We provided for all their basic necessities, leaving their allowance for their mere pleasure. This was sufficient for young children but as they grew their wants increased as did their 'basic necessities'. It soon became clear that their basic allowance was not adequate, but it was also clear that I could not afford to keep up with their needs. The system needed to be revamped. We started with our eldest lad and negotiated his allowance.
We decided on a more substantial allowance, at that time $50 per month. However, with that amount came several provisions. We agreed that he could use his allowance in any manner he pleased. We would not advance him any money should he find his funds depleted. We agreed that his allowance would pay for his leisure activities, his toiletries, his school supplies, and his clothing, with the exception of footwear and outdoor clothing. Because of the higher cost of outdoor clothing and footwear, we paid the first $50 and he paid the rest if he wanted something more elaborate than our limit could purchase. We started this allowance plan as soon as he began junior high school.
At first he found this system very difficult to follow, but he soon learned to budget his money and found the allowance very workable. We immediately noticed a difference with school supplies lasting longer than in previous years. We also saw that he took better care of his clothing. He realized that it was not essential to wear top-of-the-line name brand clothing when economy store clothing was often only one-third the price. My son also realized he could not go to every paying event he wanted to attend and had to plan his calendar in advance to ensure he went to the ones which were most important to him. Eventually all my sons went on this program as they entered junior high school. They all abided by the same rules and they all learned to save money. The allowances stopped once the boys reached the age of sixteen at which time they took on casual jobs on weekends and during summer holidays. Once they were sixteen they still were responsible for the same purchases as when they were on allowance. Budgeting was essential. The boys did not complain but learned how to manage their money efficiently. They even learned to save and buy their own bonds.
My eldest has since graduated from high school and has completely financed his university education himself. He did not have to take out any student loans but paid for his education from his summer jobs and his frugal use of money. He has maintained an 'A+' average, so this has certainly not hampered his formal education. He now proudly boasts that he funded his own university without the help of his parents.
My middle boy has just graduated from high school and is off to school in Europe for a year and my youngest is still enjoying high school.My boys are all very thankful for the lessons they learned in money management. They learned how to maximize their buying potential and how to avoid debt. They also gained a great deal of independence learning to rely on themselves. They learned valuable lessons that will stay with them all their lives and left me feeling secure in not having to worry about their future. They are proud of themselves and I am very proud of them.
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