Will we ever get allowances right? I’m trying, but it’s not quite there yet. Many years ago, I read about an economist who wanted to teach his kids the value of savings, but thought that the interest rates in bank accounts were obviously to piddly for children putting away a few dollars. So he gave his kids a small allowance with a huge interest rate. For whatever reason, that stuck in my head and I vowed to try it with my own kids. So I give them a dollar a week, but .05% interest compounded weekly on whatever they save. No, you cannot bank with me. That interest rate is only for Mushroom and BalletBoy!
First, I tried keeping a ledger, but that didn’t work. I was forever forgetting it and it was too abstract for a pair of preschoolers. Next, I tried an iPhone app called The Bank of Mom. It’s a cheap and nicely designed app, and it even calculates interest, but it won’t automatically compound and deposit it, so again, it didn’t do what I wanted. In fact, apparently no app does. Annoying that. The kids also seemed strangely uninterested, so we went off allowances for awhile. I remember being enamored with money as a kid, counting out my change for candy bars. Not so, my kids.
The kids like them. I feel all proud for having stuck a zipper on something for the first time ever! And they afford a nice place for putting each kid’s Metro card and library card. I feel like when they can carry those on their own, that helps foster independence. However, we’re still struggling to make the allowance work. I forget it. Or the kids misplace their wallets (okay, just Mushroom, but still). And while they’re interested, they still are having trouble connecting to the idea that if they want something, instead of pestering me for it (which they’re not really bad about, but they will ask) or just assuming they can’t have it, they should use their own money or save up for it.
At some point it will click. I know a fellow homeschool mom who now has her son do all their transactions in cash himself so that he can learn how and figure out the right amounts and so forth. As we’re so dependent on the ease of credit cards, I’m in complete awe of her.