My coming of age years spanned from about 1985 till 1995. Growing up in my house during that time meant that you went to work with dad, unpaid of course. Hanging drywall with dad after school and on the weekends was a rite of passage for me and my three brothers.
My dad is a man’s man. Big. Strong. Caring. An easy disposition. I love my dad! Of all the things he ever gave me, a strong work ethic and being a positive role model are the two things that have benefited me most in my life. But there is one thing my parents didn’t teach me about that I wish they would have: money.
Mom and dad definitely taught me how to work hard for my money, but not much about how money actually works, and how to make your money go to work for you. I imagine they didn’t teach me about money in this way because nobody ever taught them about it. As a result, I spent many years financially unaware, developing bad money habits, and going into debt.
Dad started his working career hanging drywall in the new casinos that Las Vegas was throwing up in the late 1960s and early 70s. Later he took a job in a steel mill that was originally built in the early 1940s to support the United States war efforts during WWII. He definitely worked hard for his money. #Respect.
I remember the day that dad lost his job at the steel mill. When the plant shut down it impacted a lot of families in our neighborhood. When dad found himself unemployed and in desperate need of cash, he did what he knew how to do best, he rolled up his sleeves and got to work. He launched his own drywall business which he ran successfully for a couple of decades. His hard work and entrepreneurship sustained our family of eight.
Fast forward a few
years decades and I’m now the dad, doing my best to raise my family of six. I don’t have the type of job where I can bring my kids to work and make them bust their butts to earn a buck (a fact which my dad is very proud of).
Rather, I’ve got a cushy office job, largely due to the talks dad would have with me during our breaks at work. Often when we’d stop to catch our breath after hanging a ceiling, dad would tell me to make sure I didn’t follow in his footsteps; to get an education. “Hanging drywall is a whole lot like work” he’d say. “Please don’t follow in my footsteps, son.”
So I didn’t. At least not professionally, but if I end up being half the man he is personally then I’ll consider myself lucky. I went out and got myself an education and a white collar job. My wife and I do our best to teach our four kids about being honest, hardworking people and while I can’t take my kids to the job site every day, I can do one thing that my parents didn’t (or couldn’t) do for me: teach them about money.
- About how it works.
- About avoiding debt.
- About paying yourself first.
- About investing it
- About how the most the most important thing that you can buy with money is your freedom, not an iTunes gift card!
My kids earn money through an allowance that we pay, and as far as allowances go I think we pay pretty dang well. Kids get $1 per week times their age. So my 15 year old gets $15 per week; my 10 year old gets $10 a week. We have four kids, currently aged 15, 10, 6, and 5. So each week I’ve got a $36 allowance bill, and the collection agents I have to deal with if I miss a payment are just as tenacious as any collection agent you’ve ever met! As such, this is a bill we don’t miss very often.
Allowance isn’t guaranteed. A minimum amount of work must be done on a daily and weekly basis to earn the money. For example, if you don’t deep clean your bedroom at least once per week, no allowance for you! Didn’t do the dishes when it was your turn? No allowance for you! Kids are also expected to do randomly assigned jobs, without complaining, whenever we ask them to help.
We make the kids save 50% of their allowance. They can (and do) use their 50% to buy Minecraft Lego sets or games for their xbox and Wii-U – I try not to say much about how they spend their money because there is value to be had in learning from your own successes and mistakes.
The forced savings of 50% is a non-issue for the smaller kids, and almost the end of the world for the older ones. But we’re trying to instill in our children the knowledge that you can live on 50% of your paycheck. Sure that’s much easier to do as a 15 year old kid that gets all of his expenses paid by mom and dad than it is to do as an independent adult that’s on their own for the first time, but it is possible.
And because I don’t want my kids to be wage slaves for 30 to 40 years, I talk to them about this. A lot. More than they’d like.
We put the saved 50% into a Capital One 360 Kids savings account that, as of today, pays 0.75% interest (better than the 0.20% my own Capital One 360 checking/savings account gets). The kids will get their saved portion when they graduate high school, which means that even without any growth whatsoever, they’ll end up with at least $4,500 bucks. It’ll be theirs to do whatever they want with, but I’d be one proud papa if that money goes straight into an IRA.
One concern I have is that my mandatory 50% savings rule could end up blowing up in my face. If the kids end up ‘hiding’ money from me just so they can spend it all, then I’ll have failed in my goal. Striking that balance where they save because they want to, not because they’re forced to, is going to be tricky.
As our older kids start to make their own money (non-allowance money) from babysitting gigs, mowing lawns in the neighborhood, etc. I think I’ll leave the amount they want to save up to them, but with a little bit of luck, they’ll happily fork over half of their cash and asked me to put it into savings for them. But I secretly think they’ll want to keep most of it so they can blow it while hanging out with friends.
I just hope when the time comes for the little runts to leave the house that they’ll remember our family’s golden rule: the best thing money can buy is freedom!
Do you pay your kids an allowance? Do you force them to save any of it? As your kids got older, did they continue to save, or did they forget everything you’d ever tried to teach them? Please leave a comment and let me know, or share this on Twitter or Facebook by clicking on the icons below. Also, if you like what you read on Get Rich Quick’ish, you can leave your email address here and get new posts delivered right to you inbox. Thanks for reading!
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