Allowance
With allowances, it seems like I hear the same broken record erh CD that keeps playing the same song: “3 separate banks, 1 for savings, 1 for spending, and 1 for charity“. It’s always the same message over and over. And of course it’s always an even split between the three (so 33% each).
I’m going to challenge this “taken for gospel” line of thinking! First, I think that this Mantra should really only apply to the rich folk (if they want to)! Their kids are probably getting over 5 times as much as my kids for allowance. So paying 30% to charity probably wouldn’t faze them much.
So I decided to bend the rules and give my interpretation of what the allowance percentage each socio-economical (upper middle, middle and poor) classes should pay. We already discussed the rich up above, but I would like to say, I honestly don’t believe the majority of them force their kids to dole out 30% to charity either!
Upper Middle Class:
This group is the impressers! I’m sure they are the closest group to contributing the full proscribed 30% allocation that they believe the rich follow. And since they can afford it, they can do as they believe. I would guess that the average 10 year old in this group could potentially make anywhere from 50 to maybe 100 dollars a week.
Middle Class:
This group is the silent masses, they represent around 60% of the population. Most of us that do give allowances to our kids, give a dollar amount of the age of the child. so my 6 year old gets $6 and my 9 year old gets $9. I’m sure a good percentage of us follows that 3 by 30% rule, but not me. My kids split the allowance around 50% for savings, 50% for spending. They also get piggy bank money, and 50% of that goes to charity. We only give to charity at Christmas time. If you take the sum of all their money, The charity portion averages out to be about 10% to 20% of all of the money they get from allowance and the old piggy bank.
Why Christmas? Because for one, this is the time to be charitable! We all have that extra warm feeling in our heart and soul to go that extra mile to help our fellow human beings (or at least that’s the way I feel).
Working Poor and The Poor:
These groups, if they do give an allowance, most likely give less that a $1 per age. And even then they really shouldn’t! They just can’t afford it. They shouldn’t have to feel the guilt associated with the 3 by 30% generally accepted rule.
So the next time you hear that liberal message on how to divy up your money… ask yourself, does it make sense for you and your family at this particular time in your life!
Tell me what you think? Does what I say make sense, or should I force current societies socialist views on the distribution of wealth to my kids?
After all, how can I teach my kids to work for a dollar, when he would be literally giving away his money to people that don’t? What kind of screwy financial lesson would that be?!?
-D
I’ve gotta disagree with your take on giving. Teaching charity year-round builds the character of giving. It’s a character habit more so than a financial habit, and tends to the personal side of Personal Finance. If you’re taught to be generous with a little, you’ll be generous with a lot.
I’ve heard the 3-jar split between giving/saving/spending, but not sure how many go that far, if at all, although I’d be curious to see if your breakdown by economic class rings true.
Thought provoking article!
.-= Jason @ MyMoneyMinute´s last blog ..Wine On A Budget: Oak Creek =-.
I have to confess, I started out that way. I was going to follow the three jar approach. But then I realized why should I teach my kids to give to charity on a weekly basis?
One not give one lump sum at Christmas, which is the time for giving? Plus I’m trying to teach them to work for money, and not that moneys not just given to you… But isn’t that what I’m doing when my I make my kids give money to charity?
Needless to say, once I though about the logic, I changed my mind on the matter!
Here a question for everybody (if you got an allowance as a kid)…
Did you give your allowance money to charity when you received it? Or has the media brainwashed us all into following this socialist behavior…
I’m just one man following a path I believe rings true. If others want to follow the 3 jars matra, that’s fine too… Just not us 🙂
I’ve been questioning our approach since we began teaching our kids about money (which was before we taught them much of anything) Our rule has always been 20% of everything goes toward “savings” which they understand to be money you never touch. This is not even emergency fund money. After that we provide guidance and insight but ultimately let them decide.
Our concern has always been if they are forced to give money away they would view this negatively. I want them to be generous for intrinsic purposes. If they cannot give it of their own free will, have they really learned anything?
You could say the same for the forced savings. We’ve always reasoned that while they can’t touch it, it’s still theirs.
Has this approach worked? Not entirely, one is a giver while the other is a consumer. We figure we still have a few more years to get it right!
.-= LeanLifeCoach´s last blog ..Ban Antibiotics and Save Money =-.
Yeah, actually my son would rather not save at all. My daughter on the other hand, is a great saver. She says she save her money in case her family needs it.
Since the piggy banks are viewed as a windfall, and it’s at Christmas, both don’t mind giving to charity.
The negativity standpoint you mention makes sense. Now I’ll have to think about if I even want to enforce the split between savings and spending 🙂
I think some things are just their personalities too. I think I’ll augment the allowance with subtle financial games or online simulations…
Very interesting stuff Don, which I have no idea about! Actually, I’ll be writing some parenting and kids posts (inquiring posts), so perhaps you and others will be able to share in on your insight!
.-= Financial Samurai´s last blog ..Sometimes Saving Money Is About Principle =-.
@Financial Samurai
I’d be more that glad to share my insight!
Actually, I would like that, the more ideas and different opinions about raising kids and the various practices people do, the better parent I become!
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Well I come from a rich family (I’m 13) and I get around $500 a month. I sponsor 2 kids in a charity with my own money….and as for the rest of it, I save half nd spend half
So I guess I do the 3 way thing
Wow, $500 a month is a great allowance!
Kudos to you for being so generous, my son and daughter give to charity, but not the full 33%, it varies from year to year.
I think if I were able to give them $500 a month each, I would request that they send a third to charity too. But I wouldn’t demand it…
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