Friday, November 9, 2012

Friday Q & A -- money and savings

{most of these are questions from this post on our money system.}

I have been thinking a lot about your dads 10-20-70 dealio... i think it's great, and wished i would have known about it long ago.  my question is, do you and Dave follow this method still in your own lives?, and if so, have there been times you have had to adjust it, or have you been super strict about it.  I am just waiting for one of our properties to sell, then i want to go full force on this!!!

Yes we still do the 10-20-70 religiously.  We have always taken this really seriously and I am so incredibly grateful for the wisdom in it.  We have always paid full tithing no matter what else needs to go by the wayside because we both feel really strongly about tithing.  We believe all that we have is really from God, so that tithing sacrifice helps us remember that we are only stewards over any gains we may have.  I love tithing even though it’s been really hard to let go of at times!  For more about tithing click here.

There have been a few times in between jobs or what-not where we just couldn’t do the full 20% savings.  But even then we saved all that we possibly could.  We wanted to always have saving be our habit and never let it go.  My whole family has done this and it has been so great as a safety-net.  My sister’s husband was without a job for over a year and because of that savings rule they had adhered to so closely they were able to survive just fine.

Have you ever done "pegs" in your family? I remember your Mum & Dad saying that their favourite question in the house " Are your pegs in?"

These “charts” are our substitute for “pegs.”  Oh man I sure wish I had pegs like we had in our family growing up because I’m so darn sentimental, but in some ways I like the charts better because we can keep track of things right there instead of dealing with the “slips” we had to put in the family bank growing up.

Any suggestions for those on a limited income? Our kids are 12, 10, 8, and 6 and so $36 per week is quite a lot for us. I think I would be excited for them to NOT do their jobs ;) Any readers have an amount they use that still gives their kids an incentive but doesn't break our bank?

I'm with you on that seeming like a lot of money, but keep in mind that not every child will get that amount every week...it's tough to get a perfect score, but half their age still helps them with the money concepts. Also, I like to think of it like a money filtering system: I am letting them EARN some of the money I would be dishing out anyway for the part of their clothes they will be paying for. But in doing this system I am giving them ownership of those clothes rather than having me just dish it out for them. They also pay for any entertainment they do with friends that some parents give their kids cash for. They never ask because they know that’s their responsibility. Believe me, I hesitated on this, but I love that they learn important lessons…if they don’t earn their money, they have to stay home from fun things or not get what they’re dying for at the store, and after a while that starts to sting a little.

There is certainly not a set amount parents need to pay, this is just what works for us. Figure out what works for your family budget and go from there.

What do you do if your children lose something, such as a lunch box at school, do you make them pay for it?

It depends what they lose.  If they were negligent and didn’t take good care of something then yes, they have to fork out the money to replace it.

How did it work for you when your oldest was the only one old enough to earn money? Was that child the only one with a chart, or did everyone still have a chart but the younger ones didn't earn money yet?

I think that’s why I figured this system was too complicated in the beginning: we tried it too early when our kids were too young to really “get it.”  I figured since it worked for me, it would work magic for our kids too.  But I didn’t take into account that I was already a teenager when my dad videotaped himself telling us all about this whiz-bang system:)  I wouldn’t recommend starting this too early or it will be frustrating.  (We’ve only done this full-scale for the last three months.)  When Max and Elle were little we concentrated more on super simple things like sticker charts, but always worked on the concept of tithing and savings. 

I saw you included Lucy on the jobs as well. How do you handle paying her when she will probably miss 1 or 2 very easily at such a young age. My children are 7, 4 and a newborn. I love the system but know it will lead to no money for my little guy at age 4.

See above answer, but to expand just a little, if your kids are really young I would make it much more simple. I should have mentioned in the original post that Lucy is not good at this system. 

At ALL.

But she is gradually learning because she’s watching her older siblings.  It takes a TON of patient training for younger kids so I would totally stick to something simple until your kids can grasp the concept a little bit better. 

I liked the comment from “Willemijn” that said: “When our kids were smaller they each had a star chart and earned 5ct per stamp or star. If they misbehaved or didn´t do their chore they received a black star that would cost them 2 stars. So at the end of the week they counted their stars and had a bit of pocket money.”

I read your parent's book "The Entitlement Trap" and we have been implementing a family economy for several months.  I have been feeling like giving up!!  I was hoping that this would magically solve the problem of me nagging my kids to get their stuff done on their own.  I felt like this would be the answer . . .  they would look at their short lists and be motivated to get them done on their own.  But, because in my mind these items on their lists are not optional . . . (homework, rooms clean, music practice) I find myself making sure they get their lists done . . . their list becomes my list because these things need to happen.  I would love your insight on this:)

This is a system that is going to take a while for kids to get the hang of.  And I’ve realized over the years of trying new things with kids that there is no magic, easy answer that teaches kids to get working and earning, it all takes a lot of work from the parents to get it going.  BUT if kids really need the money they will catch on with time.  In order to make them need the money, they have to be expected to pay for things.  I think this is the hardest thing for me…especially if a child is really wanting to do something with a friend that costs money or if they are really wanting that new cool shirt.  It is SO hard not to cave in help them pay for it, or let them do an IOU or something like that.  But kids learn so much from missing out on things and you can bet they’ll be more willing to earn that money the next week after they miss out on an opportunity. 

The hard part of this system is that you have to let them fail once in a while.  That’s how they will learn.  Let them fail by not practicing for a week and see how they squirm when it’s time for piano lessons.  Let them go to school without their homework done and let them see how uncomfortable that is (for some not-so-conscientious-kids maybe you could even work out a little deal with their teachers to make it extra trouble if they haven’t done what they were supposed to…)

And it also doesn’t hurt to have them come to pay-day with the other kids while you make a big deal about handing over their siblings’ cash.

Most importantly, be patient.  If your kids are old enough and they need that money it’ll come together. 

How do you handle your kids' activities (sports, going out with friends, birthday gifts for friends, etc...)?  Do you pay for all of those or have your kids pay for some? 

We pay for sports.  Dave feels strongly that he wants to provide those opportunities for them so he works hard is willing to let some other things go so that they can be exposed to things they are interested in.  There are some “seasons” of life where this is more feasible than others.  As far as birthday gifts go, we have our older kids pay a portion of what we spend on gifts so that they can feel ownership.  We don’t have a set amount on that.  They pay for the Christmas gifts that they buy for each other so we are in the season that they better start doing some extra jobs to earn enough!  (They generally choose things in the $20 range for gifts to each other.)  “Money Jobs” help a lot with that on top of the money system thing we are doing.

I have a question about tithing. So the kids pay tithing on the amount you give them, but have you already paid tithing on that money? Do you not pay tithing on the portion of money you pay them? Is the money "double tithed"?

Yes we have already paid tithing on the money they earn, but it is their “gain” so they pay tithing on it too and that’s my favorite part of this whole system…watching them give back even if sometimes it’s hard.  Elle earned $140 for her last photo shoot (because it was a three in one kind of deal) and when she realized how much tithing and savings she needed to take out of that she almost had a heart-attack.  But I’m so proud of her for storing it away and giving part back.

When do you pay the interest? Each "payday"?

No, interest is only once per quarter, and since we’ve only been doing this full-fledged for the last few months, we’re just about ready to show the kids how great that 10% interest is.  I’ll try to remember to let you know how much their eyes light up about that :)

Are there other chores the kids are responsible for which they don't get paid? Just "you're part of the family, so you have to pitch in" chores?

Yes we have all the regular things they’re just expected to do because they are part of a family and we all pitch in to help: Saturday jobs (here), after-dinner jobs, etc.

When you say they have to pay 1/2 of everything does that include sports/lessons? I know it includes clothes, what else does it include?

Just clothes.  They pay for 100% of other entertainment stuff they do.

Do your kids have to come clothes shopping with you then, to spend their own money?

YES!  Max and Elle are far too picky at this point to let me shop for them anyway and I am a horrible guesser at sizes without them. None of us are much of shoppers, but I like when they really are scraping the barrel needing new clothes because it helps us spend one-on-one time together.  They are sure to bring their cash with them when we shop.  I will buy things for the little girls without them there, but man, sizing is rough without them. 

I already answered this next one in the comment section of that post, but I thought it was a good question so here it is again:

Do you keep an envelope or something inside for each kid for their savings? For me I'd actually have to put the money away that they are saving so that when they cash out at 18 I don't have to scramble to find the money. How do you handle that aspect? Do you have bank accounts for them?

Since we are the "bankers" of the family bank, Dave and I will always make sure we have the funds available for them (in our own bank accounts) whenever they want to withdraw them, but they are not allowed to take that money out until after they graduate from high school. We won't actually store all their savings in there since, as you can see, that bank is not exactly secure:) It's just the principle of saving up for something really important and I hope we can instill that firmly into their minds. They know those savings totals written in those check registers are their own money, and sometimes they don't like the fact that they can't use it right now.  But they'll thank us in the long run for helping them save. (I know I sure thanked my parents for that!)

Max does have his own bank account (explained at the end of this post). Every time he deposits money in the bank he automatically takes out part for tithing and transfers 20% over to his own savings account. We'll start this up with Elle when she turns 15 (I think). 

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