Pocket Money Day, Monica Blatton (Photo credit: Monica Blatton)

I can’t resist a request. Daina owes me a Manifesto Confession for this post! (I also work for chocolate.)

Daina wants to hear from y’all about pocket money. What is your approach? What did your parents do with you?

Like many of us, she’s keen to build some financial literacy into her kids’ lives, so it’s not just about giving them access to fifty-cent mixtures (presumably inflation has hit them, but I can’t bring myself to write ‘five-dollar mixtures’) at the dairy.

SBJ is a kleptomaniac with expensive taste. Before the age of one he had stolen a wallet and collection bags at two different churches. But other than that and stuffing coins in his mouth whenever possible, he’s doesn’t have much use for pocket money yet.

But you can read about the allowance system my parents ran for us on this discussion over at Kiwi Families. My Mum was an economics teacher and has lots of useful stuff to say!

The main article she’s commenting on is by Financial Adviser and blogger Daniel Carney, and contains some great advice about how to teach your kids about money, like:

• Don’t talk negatively about money
• Get saving
• Reward the kids for cheaper household bills

Thought-provoking, right? He also links to several other resource websites for teaching kids about money, so do check the full post out. Kiwi Families also has a separate article about pocket money with a range of ideas.

Thanks to the lovely Lou I am reading a sort of classic American parenting book at the moment called Parenting with Love and Logic by Foster Cline and Jim Fay.

I really appreciate their basic approach which is to let kids experience natural consequences – sometimes pretty uncomfortable – when they’re young and not too much is at stake. If we combine this with lots of empathy, it creates an environment for deep learning that lasts. A basic example from page 43:

It was a frigid Colorado evening, and my (Foster’s) family was heading out on an errand. Gathered at the door, my wife asked our six-year-old son, “Andrew, do you want to wear your coat?”

He said, ‘No, I don’t need my coat.” He was wearing a T-shirt. Modeling responsible adult behavior, my wife said, “I’m sure glad I’m wearing my coat.” Then she put on her coat, and the family got into the car.

Two blocks from home, muffled sounds came drifting from the beackseat – the unmistakable sounds of shivering and teeth chattering. My wife said, “Do I detect goose bumps in the backseat?”

“Y-y-eah-h-h!” Andrew stuttered. The next words spoken were some of the wisest ever to passs from Adnrew’s lips: “N-n-n-ext time, I’m g-g-g-oing to wear my c-c-c-oat!”

“Oh, honey, that sounds like a good idea.”…

Had my wife said, “Wear your coat. It’s cold out,” Andrew probably would have said, “No.” And she would have said, “I’m your mother, wear your coat.” Then Andrew would have been sitting in the backseat, warm as toast, hating her, and not learning a thing.

So their approach to pocket money is governed by their love-and-logic philosophy. Some of their suggestions (121-122):

Rule Three: Never insist that children save their allowance.

They can’t learn to handle money if they stash their allowance in a shoe box… Kids must go through their own economic depression – wasting money and then not having any when they need it – to learn about money.

Rule Four: As long as they’re not engaged in illegal activity, allow children to spend, save or waste the money any way they see fit.

They can use it to hire others to do their chores. They can even hire a babysitter if they don’t want to go somewhere with the family. But there’s a catch: When it’s gone, it’s gone. No more allowance until the next week’s envelope.

They go on to tell the story of Jim’s son Charlie, who squandered his lunch money and had to live on two meals a day for a week (his parents made sure they were good ones!).

So, that’s all the wisdom I can supply on the subject – from my parents, a financial adviser and a parenting book. But Daina asked about this on the thread on patchwork parenting, so the real point is to ask all of you for your wisdom. Go ahead, please!