Sometimes Tom’s articles bore me, so he thought I should write an article on a speaker that I heard recently. We have adopted many of his principles regarding money with our children, and I was completely sold on his information.
The speaker was Nathan Dungan, and the title of his talk was “Raising Fiscally Responsible Children in an Age of Entitlement”. He is also behind the “Share, Save, Spend” philosophy with regard to allowance.
The biggest takeaway from what he said was, “our children are bombarded with 5,000 images of ‘things’ almost daily, and the biggest thing that we can do is delay gratification.”
To help with this, give kids an allowance to hold them accountable and to responsible, and to not become their ATM. The best way to do this is with his “Share, Save, Spend” method.
Basically, he says if you give each kid $1/year of age/week (ex. 10 year old kid gets $10 per week), then they distribute the money (you decide together on the percentages) between:
1) Share (charities that they want to give to)
2) Save (this can vary, but it can be something long term such as a car, or short-term such as a bike).
3) Spend (let them blow it and make mistakes, that is how they are going to learn as painful as it’s going to be, might as well get this started with small amounts of money)
Since we rarely use cash, what has worked for us to remember to pay them is to have a check mailed automatically every month. So, for example, our 11-year-old gets a $44 check monthly, and then we periodically take him to the bank to cash his check. He then takes his cash and distributes the money to the appropriate jar.
A fun success story, last year he was doing a 4th Grade service project. The teachers had asked that the kids do some extra chores around the house to help donate $5 to a sandwich charity for the homeless (they were actually making sandwiches for this project as well). Our son had been saving his ‘share’ money for something but just didn’t know what yet, when he learned about this great charity he was all in! He brought nearly $80 to donate, and his teacher was in tears. The importance of giving clicked hard in him, and he not only knows what helping others can mean but also for the soul as well.
This has been so tremendously successful for our family, and we hope it can help yours as well.
Thanks for taking a look!
Allison Gartner, CEO Gartner Household
This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.