In my previous blog on allowance and chores, I mentioned
that we used “working for pay” approach from Neale S. Godfrey’s book “Money
doesn’t Grow on Trees” to give our children their allowance. Now that they’ve worked for a whole week,
the payday arrives. Instead of giving
them the lump sum of what they’ve earned for the week (just a few dollars), we
divided the money into 4 parts, using the “4-jar budget system” in the
book.
The first 3 parts are 30% of the pay each, one for Quick
Cash, which they can use right away, one for Medium-Term Savings, which they
can use to purchase more expensive items and one for Long-Term Savings, which
in other words, is college fund. The
last 10% of the pay is for charity.
Since the girls’ Chinese school is run by a charity organization (Tzu
Chi Foundation), we normally donate the money to them. If the girls feel that there is another
cause that they want to contribute to, such as making little food gift bags to
homeless people, or helping chimpanzees by donating to the Jane Goodall
Institute, they can take the money out to do that. Over the years, they’ve used their Medium Term Savings on sewing
machine, bicycles, or keyboard. We paid
half for such big items while they pay the other half, but the ownership of these
items belong to them.
After my older daughter learned how to do decimal addition
and subtraction, I created and printed out a simple version of savings account
balance sheet for her to record her income and expense on her Quick Cash and
Medium-Term Savings. Not only does she
get a practice of math, but she also knows how much money she has that she can
use. The only drawback of this, though,
is that she enjoys watching her money grows so much that she hates to spend it.
There are much more money concepts that we can teach our
children. After writing this blog, I
realized that I needed to review the book and perhaps add or make a few changes
with the routines. If you have other
ideas, please share them with me in the comment area.
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