Last week on the way to church I was listening to a radio broadcast. I have no clue who the speaker was, nor do I even remember which station or show it was.
The part that I heard was a discussion of the welfare state, immigration, and personal financial responsibility. The points about immigration, illegal and otherwise, were interesting, but I'm not going to talk about them.
The one point that I want to talk about in this post, though, was the speaker's observation regarding children and disposable income. He pointed out that many (though not all) parents of teenagers allow them broad discretion over what to do with earnings from their part-time jobs, while they provide them with their necessities (food, shelter, and maybe even clothing). This practice, he contended, leads them into adulthood with an implicit, perhaps slight, tendency toward entitlement, just by the fact that they were used to someone taking care of them.
As we plow forward into rougher economic times, we'll be able to weather them better if we help one another. This was how people in the Great Depression made do. What the welfare state has done is conditioned people to believe that someone else will take care of them, with or without help from their end. If it's not clear that the state cannot do this for everybody, it will become painfully clear, and sooner than we would like.
I had a paper route through high school. It wasn't a huge amount of income, but it was far more than any allowance I would have gotten from my parents. I contributed a few thousand dollars to my college account, but other than that, it was mostly mine to save or to spend (though they encouraged me to save). I never was asked to contribute to household expenses. I know that not everyone has this luxury, and I'd like to think that it didn't make me a weaker person, but then again, I was never really tested. Our family didn't get to the point where I would have had to be tested, and I'm thankful for this.
But why not have kids contribute to the running of a household? If they earn, say, $100 per week before taxes, why not have them put in $25 of that toward groceries or household items? This is personal finance at more of an adult level. It's still a watered-down adult level, but it's closer than deciding whether to spend the money on pizza or movies, or spending it on clothes, or saving up for their own expenses later. And no, I don't think making the kids buy their own clothes quite cuts it. Clothes benefit the wearer alone and make him/her look good. They don't benefit the family as a whole.
This kind of training could tip the balance away from bankruptcy or foreclosure. If children are conditioned to contribute a share of their labors to the family, it's less of a stretch to get them to forego most of their discretionary income if things get tight. Likewise, it makes it less of a stretch that they might take on extra hours if it might make the difference in the house they live in getting foreclosed on, or not. Is it really completely fair to put all of the responsibility on the parents for losses like these, when teenage children are bringing in money, too? I'm not sure it is. If it only makes a difference of a few months, then so be it, but then they were able to live in the house for a few more months than if it were only the parents paying the bills.
Introducing children to real-life budgeting early is helpful. Then they won't be shocked with how much it costs when they're really on their own.
(Thanks to Green Panda Treehouse for including this in the Carnival of Personal Finance!)
Not a bad idea. It would certainly help them and their families if high school age kids (at the very latest) were forced to contribute to household expenses. I'd even go a step or two further; you could have children who aren't working an outside job contribute return part of their allowance on a monthly basis. If they get $10 a week, you could have a $10 'rent' at the end of the month.
Besides getting them into the mindset that they have to help and contribute to the household from a very young age, it'll also help them to learn how to manage their income. If they put aside three dollars a week or so, they can avoid having to go without spending money the week that the rent comes due. It's a nice way to ensure that your children understand that life isn't free, however much we might all wish that wasn't the case.
Not a bad, idea but the parents should not count on it as income to run the house either.
I suggest the parents put that money away for the child at a later time. Be it a graduation, wedding present or other gift later, once the education piece of teaching the child about money has passed.
I love this idea, mostly because this is how my mom trained me. When I was around 16, she gave me a bill that was my part of contributing to our single parent household. By the time I started college, I was well aware of the fact that being an adult meant being aware and thoughtful of how I was spending my hard earned money. While I did get into financial difficulties later in my twenties due to divorce, I can say that I didn't fall into the problems of credit card debt and everything that all my friends dealt with because I understood that stuff from an early age.
In my house, the oldest of my three children is 12 and the youngest is 5. They are all VERY aware that we live within a budget and if we don't have money for something, it doesn't get bought. People are often surprised to hear my 5 year old say, "is this in the budget?" or " when there's extra money in the budget, can I have this?" The trick is to balance that knowledge with the understanding that they can always ask for what they need/want and we'll discuss and plan for how to get it, if it's truly something of value. I had to make that distinction to my 12 year old because my husband was laid off in November and my 12 year old wasn't asking for things he needed at school because he didn't want to add extra stress to me.
Anyway, that's my .02. I came out of lurking to say that and also to invite you and your readers to my friend's new website that is launching tomorrow. Tricia is a freelance writer and mother of 4 who definitely understands the need to stretch a dollar as far as it can go. She's been really bothered by all the stories we hear about people being laid off and started this new website as her way of trying to help out. BudgetArtists.com is dedicated to providing resources to help families live well during hard times.
To launch the site, she's having all kinds of giveaways and free seminars on everything from job hunting to home management. I hope ya'll will drop by and check out all of her hard work!
Thanks.
Shauntelle@ A Beautiful Abode
Awesome idea! I'll have to remember this for the times when I have my own kids
I had to contribute as early as 11 years old.
As a matter of fact, one Christmas, we were so broke, I walked to the store and came back with a shopping cart of food.
My dad was so proud … RIP.
I have been using DesktopBudget.com to manage my personal finances for a few months now. Its the easient to use free, offline personal finance manager I have seen so far.
I got my first job when I was 15 after my single mom was suffered an accident at work and was put on disability. There was absolutely no way that she was able to pay for things for my 14 year old growing brother and I so I took over that role. From that day until my brother was 17 and I was 18 I provided everything we needed for school as well as clothing, transportation costs (we lived a ways from our schools) and pocket money for the two of us. We also helped to conserve within the house.
I think it taught us both a valuable lesson. We've learned to be prepared for a disaster. We've both become industrious people who do not depend on jobs as our sole source of income and even better, we have learned the value of every single penny we have earned. The situation made us both fairly independent very quickly. When I have kids they'd better be ready to cough up 20% of earnings for room and board. Another 20% directly to savings. They will also be responsible for 50% of their education. They'll be lucky. I was responsible for 100% of mine and helped my brother as well.
I'm a firm believer that most kids have no clue how much life costs at all, aside from a movie ticket and a burrito. What if parents began sharing their budget with their kids when they are old enough to handle it (assuming they have a budget of course!), so that they can get a feel for just what it costs to run a household. It might help put in perspective the mandatory contributions to car insurance, gas, or food.
Great idea! I will need to keep this post around for when my daughter gets old enough to work. She's 11 now, but I know it will be here before I know it.
Hey – I love this – they gotta learn through real life, and that involves making mistakes and learning valuable lessons. My three kids are aged 18, 20 and 22 – I managed to get a good rental for them and they are all living away from home in the same ( large) flat. They have recently got their first gas bill in for £700 !!! and they asked if I would help them out. I said that I would LOAN them £300, and they could pay me back by delivering my business leaflets on A Saturday morning. They have 10,000 each to do. That'll teach them to put the heating on timer instead of leaving it on all day when they are at work!!!!
What should be weekly grocery expense for family of husband/wife/two small kids in Adelaide?
My 14-year-old daughter and I actually discused this last weekend. (I'm a divorced mom.) She and her twin brother have the habit of eating whatever they can find, and then there is nothing left for lunches, snacks, etc., the last few days before a paycheck. What we've agreed to do is, they will get an addition to their allowance and will be responsible for buying their own snacks and lunches at school. If they choose to pack, they are responsible for making sure they have a healthy lunch, or they can get the school lunch (we're on the reduced lunch program). I believe it will help them learn to budget and shop wisely, and I am hoping it will reduce my overall food budget. I also hope it will help reduce the amount of snacking they do. Neither is overweight by any means, but they do need to learn to make better choices. My job as a parent is to teach them life skills and prepare them for the adult world as best I can. A yearly clothing allowance is next on the planning schedule.
Sorry, I think your idea is taking it too far. As parents, it's our responsibility to raise children to responsible independent adulthood but it is still our responsibility to provide for them. Parents teach children to contribute to the household in a variety of age-appropriate ways such as chores. As kids get older, move them into money management, eventually reaching the point where parents provide money for a basic amount of clothing and the child makes the choices or supplements with his own money. Show teenagers how much things cost, go over the family budget. But it is still a parents' responsibility to provide.
Does your approach teach children that it is OK not to provide for their own children later in life?
By the way, here's a scenario where your idea could backfire – what if the child decides not to earn any extra income at all. Then he has nothing to contribute, but you still provide. Is that teaching a sense of entitlement?
I'm with Kelly. It's our responsibility as parents to provide for our children.
I just feel like kids today don't really enjoy as carefree a childhood as I did, or my parents for that matter. I'm told it's an erosion of innocence over the generations. Kids just get "older" faster. I would not wish to add money as a worry for my children, growing up is hard enough.
Also, would it not be fair to give a child who is contributing more say in the family. For instance, if they're giving money for the food fund, wouldn't it be correct to let them chose what they eat? No, this is a bad idea. Kids aren't ready for these choices and this responsibility.
I really like this idea, but I personally think it would work best with an older teen, unless you have a really mature 12-16 yr old, that is ready and able to understand the complexity of budgeting, family finances, expenses, etc.
I completely disagree, however, with the last post. How is it that in today's society we come to think of life as being "hard enough as it is" in this day and age of extreme instant-gratification. I'm actually shocked to see such spoiled kids everywhere – not only are their basic needs met at home (food, shelter, clothing), but their every "wants and desires", as well. They now have cell phones, iPod's, Nintendo DS, Starbucks in hand, you-name-it-they've-got-it.
I'm sorry, but I see much of our society raising spoiled children who think only of their wants and needs, and not those of others. The days of saving up for that special gift for "mom, dad, grandma, etc" are quickly becoming a thing of the past, IMO. Based on what I've seen and experienced with my 5 children so far, I think this will be a positive, eye-opening & enlightening experience for them. My oldest is 14 yrs old. He earns a "commission/allowance" for the chores that are expected of him. At this time we have taught him that 10% goes to tithe & 10% goes into savings. When he is of age to hold a real paying job, I think we will sit down and discuss this idea with him. For starters, we will look at the groceries that he consumes mainly himself. Perhaps we will let him be in charge of buying his "favorites" with his money, and at the same time teach and encourage him to use coupons, which he is actually starting to catch on to just by watching me, LOL!
Great discussion, gives us something important to think about, especially in today's economy!
That's really pretty awful, and a disincentive for the child to even work – paying half of your after-tax income for something parents really should be providing their children? I think it's wonderful to teach young people about money and budgeting – but seriously, charging them for food just because they are working?
To me, this idea smacks of finding a way to supplement the household income rather than teaching your child life skills.
There are many ways to teach your child the cost of living. For example, I was acutely aware growing up of the cost of food by helping my mother with grocery shopping. There was a budget, and I went through the weekly circulars with her and took pride in squeezing every penny we could. I also developed a basic knowledge of how much, say, bananas should cost per pound, when I went off to school, which was extremely useful. There's no reason you can't do this with other expenses too, like utilities bills. Young kids love to feel like they are helping. You could make it a challenge for your child to help reduce your energy consumption or grocery bill. Older kids have a lot of extra costs that aren't necessities, like after school sports or school trips that they can help pay for which will teach them that dollars can only go so far and they may need to pick and choose between their wants. Which do you think will be the positive lesson? "I'm taking $25 dollars from your money to pay for your soccer" or "I'm taking $25 to pay for the water bill". Even if you are skimming money to put into a savings account or a CD for their college education, they will still understand that the money is still theirs.
Taking away a portion of their income to pay for general family expenses as an instructional tool seems logical to an adult, but it hasn't been that long since I was a kid, and I know that if it had been me, I would have seen it as unfair, and even punitive. Childen don't see things the way adults do, and you need to take that into consideration. You're not doing your child any good if they don't understand the lesson the way you intended.
We all knew when we had our children that there would be expenses associated. They aren't renters who signed a contract with you for food and board. They are dependent on you for the necessities of life by your choosing, not theirs. If there are sacrifices to be made in order to support the family you planned, they are yours to make, not theirs. They already have little control over their own lives. Taking a significant portion from the income that under their control to teach them a general lesson that "life is expensive, get used to it" doesn't give them any specific tools to use to handle money. It's like giving your child some tools and telling them to build a birdhouse, then coming back and taking away their hammer because you need to use it.
There are two ways to teach a lesson, you can punish mistakes or you can reward successes. We use a mixture of the two as parents, but rewarding success is scientifically proven to be the strategy that results in more consistent desirable behavior. If your child feels punished or as if they are being treated unfairly, they will not learn the lesson.
Julie,
You make some very good points! Thanks!
This is a great blog and a very interesting idea. Glad I found it! It occurs to me that there are variations on it that might be worth trying. Of course,
If the family finances are desperate, then anything but asking them to contribute is a luxury–that’s where those lessons from the 1930s Depression came from, I suppose. And Depression survivors are very resourceful and give great money advice, that’s for sure.
But if it’s about the lesson, and not about needing the money to make ends meet (along the lines of the response from Carl below), here’s something I’ve
tried with teens:
Have them be in charge of grocery shopping for a month. You give them the money, a very strict amount, with a list of items they have to buy. All the junk food they are attached to they only get to purchase if they can buy everything on the list first. Of course you make that really hard. Let them go to a couple of stores and comparison shop.
They’ll learn a lot. I notice you can teach teens a lot with making them work for two things in particular: junk food and TV 🙂
I’m a college professor and a family finance journalist, and if you need more planning and lessons for the kids in this craazy, stressful economy, visit my blog, AskAnne. I’ve just posted a 3-month plan, in case someone at home has been laid off, a 1-year plan, and a plan for single parents, all with lessons for the kids. The plans are designed for reducing costs and finding new income during the recession, even if you manage to keep your jobs.
–Anne
My parents made me pay rent and pay for food when I dropped out of high school. They wanted to show me how it was in the real world and that I should have stayed in school and gotten my education, so I could have gotten a better job. The job I got was working for winchels donuts. what a lame job that was.
cool article…thanks.
This is a fabulous idea and my husband has put it into affect these past 2 months before I read this article. It is good to know that we are doing something that other people are trying.
She is 7 years old and she sees a printed paycheck stub that includes taxes, groceries, food, and rent. She starts with 42 dollars every two weeks and my husband then breaks is down to 7 dollars a week for her. She is able to see that her paycheck doesn’t just come without taking money out and she needs to work for her allowance. It is an invaluable lesson for a 7 year old. Thanks for the updates.