Lessons on money and charity

Last year we got the kids banks like this one and decided to start paying them an allowance. Sayer gets $1.50 a week, and Duncan gets $.75 a week. Well, except that Duncan doesn't care about money yet. He'll ask for coins, play with them, give them to Sayer, fight over them, put them in his bank, empty his bank, leave coins in a pile on the floor, put them in the wooden treasure chest, etc. Coins are still toys for him, rather than being money, so we haven't been following through with an allowance for him. And, truth be told, I'm really no good at remembering to give Sayer hers, either. She doesn't bug us about it, and without some kind of reminder, weeks go by before I think of it. I've doled out several weeks of allowance at a time, 4 or 5 times this year. Maybe next year I'll do better, right? :)

But at any rate, Sayer gets $1.50 a week, and she has this cool bank (hers is the garden one - Duncan has the space one in the link). Last year I didn't think she'd be able to grasp the concept of interest, but I wanted to do something to encourage saving over spending. So. This is what I came up with:

For each $1 that she put into the save portion of the bank, I added $.10.
For each $1 that she put into the share portion of the bank, I added $.05.
I added nothing for each $1 that she put into the spend portion of the bank.

In June, at a Mom's Breastaurant event, Sayer asked if she could have her face painted. It cost $5. I told her I'd loan her the $5, but she'd have to pay me back from her bank when we got home. I asked if that was what she wanted to do, and she said yes, so I gave her the money and she got her face painted. When I collected the money back from her the next day I asked if it had been worth it to give me all those quarters for face paint that only lasted a little while. She said yes and handed the money over without any complaints. Other than that, she has not spent any of it.

Sunday we caught up on paying out allowance (I added in a couple weeks so that we're paid in advance through the end of the year) and we traded out all those quarters, nickels and dimes for dollars (man, her bank was HEAVY!). At the end of the year, between allowance, bonus money for saving and sharing, nickels earned for extra homework, and found money, she had $35 in savings, $30 in share, and $20 in spending. It all adds up!

At the bank on Monday Sayer and Duncan each picked out two tags from the tree for children to shop for. Sayer picked two girls - one 5 year old and one 14 year old. Duncan picked two boys, one 6 months, and one 11 years old. I told Sayer that buying presents for these children was how we would spend the money from the share portion of her bank. She told me 'I know, I know!' :) So, yesterday we went shopping.

Sayer decided that the 5 year old would like a doll, and the 14 year old would like a purse with chapsticks and a couple bangles in it. She and Duncan decided on a rattle and another toy for the 6 month old, and Duncan picked a bionicle for the 11 year old. At the cash register Sayer put the gifts for her girls on the conveyor belt and I handed her the money from her bank. She was very proud of herself for picking the perfect gifts, and for buying them for the other children all by herself.

We've talked, over the last couple months, about interest and how it works and why it's paid and how it's earned. She understands it as a basic concept. While I'm not going to change the added dime or nickel for each dollar saved or shared in her bank at home, we decided to take her saved money to the bank today when we brought the wrapped gifts in to put under their tree. Sayer knows that with her money in the bank it will earn interest there because the bank will lend it to people who will have to pay for the privilege of borrowing it, and though most of that fee will go to the bank, some of it will go to her.

So, we had lessons on money and coins, on saving and spending, on sharing and being charitable, on shopping and buying, on investing and interest ...