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Teaching Your Kids Dollars and Sense
By DaveM | November 29, 2007
Tomorrow is a big day at the Mauder household… Our 19 year old daughter is finally moving out on her own.
Yup, she found a small studio apartment and signed a rental agreement. Of course, she only has a part time job that pays around $200 per week, she has zero savings, and up until yesterday she didn’t even have a car of her own!
Earlier this year, she decided to drop out of college and take a year off to “find herself”. Since then, she’s been mixed up with friends who are “less than desirable” (from the parental perspective), she has been doing some things we don’t approve of, and she goes out dancing at bars on “goth night”. She stays out until the wee morning hours, and then sleeps all day.
There’s very little contribution on her part anymore to household chores, and she seems to have developed a complete lack of respect for our feelings (given the fact that we can barely sleep until she’s safely home at night). She doesn’t call and never answers her cell phone when we call.
As a result, we’ve had to take a tough stance with her and restrict her from using our car if she’s just out running around with her friends. For the past several months, she has only been allowed to use the car for back and forth to work. Anything else — she’s on her own to find a friend with a car.
I’m also guilty of “spying” on the kids to find out what they are really doing. Hey, I never get a straight answer to anything, so I have to resort to alternate information-gathering methods! 
Needless to say, she doesn’t seem to be turning out exactly as we had planned and hoped. At this point, we can only pray that she gets it all out of her system and puts her life back on track fairly soon. If not, she could end up living in a studio refrigerator box! 
It’s very disappointing, for us as parents, knowing how many advantages and opportunities she is throwing away because of the choices she makes.
My wife works for one of the big-3 auto makers and has outstanding medical benefits. The company also provides financial help for college. Once my daughter decided to drop out of college, she lost all that.
The little bit of money she does earn gets spent on music, movies, going out to eat, and “hanging out” with her seedy friends. I’m not bitter.
Since she decided to drop out of school to be a professional slug, we started charging her room & board. Our philosophy is, and always has been, we’ll help you as long as you’re willing to help yourself.
Despite our repeated attempts to explain the many pitfalls of her decisions, she is hell bent on “doing it herself.” She just doesn’t want any help from us.
I can actually relate to that attitude because I was the same way at her age. In fact, I dropped out of college and joined the Navy because I didn’t want “handouts” from my parents. After the Navy, I immediately went back to college, graduated (on the GI Bill) and now have a successful career as a computer engineer.
So…. All hope is not lost (yet). We’ll see how things shake out once she’s on her own for a while and realizes what it’s like to have real responsibilities and bills to pay.
As parents, this is very hard for us because we WANT to help our kids. But at the same time, we want them to pull their own weight through life and not develop a welfare mentality.
Yesterday, we decided to give one of our cars to her, and she accepted. When we suggested it a while back, she didn’t want it. Maybe reality is starting to set in, and she realized it might be hard to move out and still get to her job without a vehicle.
Don’t get too excited… It’s a ‘99 Suzuki Esteem and it has a couple “issues”. Nothing major. The car will get her from point A to B for a while, and she’s free to sell it now and put the money towards something better.
We also paid for the title transfer, new plates, a fill-up of gas, and her insurance for the next 3 months. We’ve also been buying her little household items here and there. Oh, and we’re giving her a vacuum cleaner.
That all made us feel a little better. Hopefully it takes some financial pressure off of her so she can get a good start.
Now that I have all that off my chest….
Personal finance is definitely one area where I wish we would have done a better job of teaching and mentoring our kids. Don’t get me wrong, we talk to our kids quite a bit about money, budgeting, being smart consumers, investing, etc. But sometimes, you can hear things like that a million times and it just doesn’t sink in until you experience it for yourself.
When my daughter first started talking (several months ago) about moving out, we bared our financial souls to her and showed her everything it takes to run our household. We also helped project what her living expenses would be, and tried to impress upon her how important a budgetis to personal financial success.
I’m not sure she’s “getting” it. Hopefully more has sunk in than I’m giving her credit for. Again…time will tell.
If you’ve read this far, you probably think I’m just venting about my daughter. That’s partially true, but I have a bigger purpose for this post - especially if you have children.
During one of my recent jaunts around the Internet, I found a very cool website called Active Allowance. This is such an awesome concept, I had to share!
Basically, Active Allowance is a web-based service that helps you create an allowance and responsibility system for your young children. It teaches kids about responsibility, values, making smart financial choices, and appreciating things - especially when they have to work for them.
Your kids will have their own login to the website where they can check off items from their responsibility (chores) list. You can choose whether or not to tie allowance to individual chores, or just give them a weekly amount.
You can even create bonus items to give them an opportunity to earn more by going above and beyond the call of duty.
Once chores are completed, their earnings are calculated and deposited automatically into their “family bank account.”
Alternatively, your kids can setup a mini-budget and have their allowance automatically deposited into various accounts. What a great way to teach kids about envelope budgeting!
I truly wish I would have known about this service back when my kids were 5 or 6 years old. What a difference it could (would) have made!
Active Allowance offers a free-trial guest login if you’re not ready to sign up yet. However, if you want to register, you can use it for free (basic membership) with a somewhat scaled back feature set.
On the other hand, a Full membership costs a paltry $19.95 per year (yes, I said per YEAR) and adds the following features to what you already get with the Basic membership:
- create a virtual family bank, with several savings accounts for each child
- create log-ins for each child so they can view their accounts and print virtual checks
- use a simple budget tool to determine logical allowances
- create a link between chores and allowance
- view the Budget Gallery, where other members have posted examples of what they’re doing
As if that wasn’t enough for a measly $20/year, you get a full 4 weeks to decide if it works for your family!
C’mon people — do yourself and your kids a HUGE favor by signing up for this and giving it a try.
Please note, I am NOT an affiliate of Active Allowance. Heck, I don’t even think they have an affiliate program. I get NOTHING for recommending the service to you - other than a good feeling that I could be helping your child have a better financial future!
I just think it’s such a cool idea that can have an immeasurable effect on your kids’ long term financial success.
My children are already grown so I kinda missed out on the more formative years…. But if you already use Active Allowance, or sign-up for it as a result of this post, PLEASE post your comments here and tell me how it works out.
I’d love to hear from you - and I’m sure others would love to read about your experience.
Here’s the link again in case you missed it up there… Active Allowance - Teaching kids dollars and sense
May 18th, 2008 at 4:25 pm
[…] so nice to unexpectedly find unsolicited praise during some aimless browsing I just came across Dave Mauder’s blog entry on his “Money Matters” site where he talks about his headstrong 19 year old daughter. […]