Saturday, July 9, 2016

Let Your Kid Choose The Spend-Save-Give Allocation

Today’s fantastic family finance article is:

Slice of Quiche


Every parent knows it’s wise to teach kids to set aside some money for saving and giving before getting down to the spending. It’s a habit that will serve your kids well as adults.

But what percentages should you require your kids to withhold out of every chore, allowance, birthday, or holiday dollar?

None!

Let your kids decide instead.

But only after a thoughtful conversation.

What’s the saving for? A bike? That first (used) car? A share of college expenses? A Roth IRA contribution?

“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.”
~Thornton T. Munger

What’s the giving for? Animal rescue? The homeless? A favorite charitable organization?

“No one has ever become poor by giving.”
~Anne Frank

What’s the spending for? Needs? Wants?

“He who buys what he does not need, steals from himself.”
~Swedish Proverb

Now, with all that in mind, how would your child like to split every dollar?

There’s really only one wrong answer here: zero percent in any of the categories. Beyond that, it’s all good. And the allocation can always be adjusted over time. After more experiences, more thoughtful discussions.

So let your kids choose the spend-save-give allocation. Their choices just might surprise you. Pleasantly.


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