Yesterday, my oldest son (who is about to start kindergarten in the fall) and I were looking at his portfolio from his two years of preschool work. His teachers collected quite a few of his art projects, photographs of his activities, and other materials and presented it to our family after his graduation from preschool.

We had a lot of fun looking through the book together, cuddled up on the couch. He told me about many of the things they did over those two years. He talked about some of the things he learned, some of his favorite art projects, and which teachers he really liked (he actually seemed to like all of them quite a bit).

When we got through the book, I looked over at him and asked him what he thought would happen next. He was quiet for a bit and then he told me that he’d ride the bus and go to school in August. He thought school would be like his preschool, except with more time spent learning and not very many recesses (I told him I thought that was probably pretty close to right).

I told him that, in thirteen years, he would graduate from high school and we’d have a big party. After that, he might do anything. He might have started his own business, for one, or he might go to college. I told him that college was like school except that you didn’t live at home any more and you have to pay a lot of money to go there.

He looked at me. “I don’t have a lot of money.”

I put my arm around him, pulled him close, and told him that he’d have more money than he thought and that we’d help him pay for it.

And I meant every word of it.

I was extremely lucky that I wound up having more opportunities in life than my parents had. They didn’t have a lot of money, but they gave me the things they had to give. For example, my mother kept my nose to the grindstone and didn’t let me waste away my time getting into trouble as a kid. My father showed me the value of human relationships and connecting with other people.

I’ve taken the things that they’ve given me and built a life on that foundation, and now I have children of my own. Can I give them a foundation even better than my parents gave me?

I want the world to be their oyster. I want them to wake up when they’re in their twenties and feel like the world offers them an abundance of opportunity.

What do I need to do to get them there? I need to make sure that they have every opportunity possible to succeed along the way. They need to never worry about having the things they need to grow, like a musical instrument or money for a field trip. I need to expose them to the world through travel and experience. I need them to not worry about money when they’re considering what college to go to: the question should be which one puts them where they want to be in four or five years?

Those things all require money. They each require you to have some degree of financial stability, most likely in the form of both a steady income and a significant amount of savings. The only way to get there is through good financial behavior.

Which brings me back to that interaction with my son as we’re both kicked back looking at his portfolio. When he asks me about his future with a bit of worry in his heart, I can look at him and, with complete honesty, I can tell him that I’m doing everything I can to make sure that his future is everything he hopes it will be.

Good personal finance tactics simply underline my ability to be a good parent. I can give my child the honesty and the emotional reinforcement he deserves, simply because I’ve learned to keep my spending in check and I’m prudent with the money I have.

That’s a big win in a dimension that I never really expected when I first sat down five years ago to address that pile of debts in front of me.

This morning, as my children were waking up, I was inspecting their dresser drawers looking for clothes. I pulled out clean underwear and socks for both of them, but rather than continuing through the drawers, I started digging through their clothes hamper, inspecting the clothes right in front of them.

I’d examine one garment, say “This is dirty,” and throw it in one pile. I’d look at another, sniff it, and then decree “This one’s just fine,” and put it in a second pile. I invited them to join in, too (though I kept an eye on the items they were passing judgment on, especially ones they decreed to be clean).

Soon, the hamper’s contents were sorted, leaving two piles. I threw the dirty pile back into the hamper, then began folding the clean pile. As I did this, I also described what I was doing: “Many of the shirts and pants and dresses you wear aren’t really dirty unless you get dirt or other stuff on them. You can wear them again.” To illustrate this point, I let them choose their clothes for the day right out of the clean pile.

As they were brushing their teeth and getting ready for the day, I did a similar sorting of my own clothes right in front of them, retaining some and putting others aside for washing.

Obviously, this sorting technique cuts down on the number of laundry loads that we have to do, saving money and time.

Perhaps just as important, though, is involving the children in this and explaining to them what’s going on so that they view such tactics as the normal way to behave. If this is simply how they do things as they grow up, then they’ll spend less of their money on unnecessary things and have more of their money for other (ideally better) purposes.

Here are some other things we do around our house to encourage our children to think frugally.

At the end of a meal, if there are items still on the table, I’ll ask our kids what they think we should do with it. They’ve learned that what we do with extra food is save it for leftovers, which we have for dinner roughly every other night.

When it’s time to drink a beverage, I encourage them to drink water because it’s both cheap and healthy. Our oldest child now simply gets water whenever it’s time for him to drink a beverage.

When it’s time to read, we use library books and accentuate their usage. I’ll almost always mention that this book came from the library for free or that we need to go back to the library soon to get some more great free books when I’m reading them a book that came from the library.

When I utilize one of them as a helper, I’ll point out things like the types of lightbulbs we use and why we use them where we do. “This is an LED bulb, which is perfect for outdoor use. It’s a little more expensive, but it uses very little electricity and it’ll last for a very long time.”

I also utilize them as helpers for things like garden work (something I’ll depict in a bit more detail later this week), which is almost purely a frugal project.

Life is full of moments to make better spending and time choices. If you’re a parent, those moments are often also teachable moments.

I get asked this question all the time, and I think it’s one that’s got enough cultural pressure behind it that it’s worth discussing. From a purely financial standpoint, why should a man get married? Let’s look at the reasons behind this question first.

The argument against marriage for men is pretty straightforward. The most common reason given for men not to get married is that the financial outcome of divorce proceedings is seen to be unfair. As the argument goes, the average male salary in the United States is higher than the average female salary, yet when couples are divorced, the splits are often 50/50 – or, in some cases, skewed towards the partner with greater financial need.

Usually, along with this, issues and concerns about children are brought up as well, along with other concerns about losing the freedom to make life choices and so on. Generally, these issues fall much more into the realm of the emotional than the financial and vary so much on a case-by-case basis that they’re difficult to reasonably discuss.

Instead, I’m going to stick with the financial side of the equation.

Along with that, I’m also going to make a fairly bold statement for the anti-marriage folks out there: it’s financially beneficial for both men and women to get married. There are a lot of reasons for this.

Almost always, you’re both going to be bringing in an income. There will simply be more money coming in than before. Often, it’s a lot more money, approaching a doubling of income for both of you. That’s a lot more money to live on, day to day. There’s also the fact that you’ll have two sets of benefits to choose between. If one of you has better insurance, then you both have better insurance, for example.

You both benefit from economies of scale, meaning your expenses won’t rise as much as your income will. If you’re living in a one-bedroom apartment, it’s often very easy to get married and stay in the same place. Rent doesn’t go up, and the utilities will barely budge. Even if you do need to upgrade, your housing costs likely won’t double (like your income did). You’ll also be sharing electricity, phone service, internet service, and so on – one bill for each of these things instead of two. While food and household items will jump a fair amount, having both of you at home means that bulk buying makes more sense. Buy a gallon of milk instead of a container and you’ll be spending less per glass of milk, for example.

You have greater earnings stability. If you lost your job while single, there’s suddenly no income coming in. Panic time, in other words. If you’re married, you have a partner that will still be bringing in income, a partner that has a real stake in your survival and continued success. While it’s an urgent situation, it’s not a panic situation.

You have greater earnings potential, too. With a partner at home handling some of the household needs and providing emotional support, people can often use that as a springboard to achieve even greater success. This is often particularly true for males with children.

You have the “stable home” factor. Married couples often find greater success with things such as applying for mortgages and so on, particularly if they’re manually underwritten, because such family units are usually more stable than single folks.

But what about the pain of divorce? Most of the fears that men have about getting married are actually fears about divorce. The truth is that you can alleviate most of those fears by simply taking a few steps right now.

First, don’t get married until you’re absolutely sure. If you’re not sure, don’t sit on that reason, either. Don’t be afraid to talk about your concerns and make it clear to your partner why you don’t want to get married. If you can’t have that kind of open conversation about marriage, either you’re not emotionally ready for marriage or your partnership isn’t ready for it.

Second, if you have assets you want to protect, get a prenupital agreement. Part of a good prenupital agreement is a base understanding that you’re both going to financially benefit from this marriage for many of the reasons stated above. An agreement that says that one of the partners takes nothing away from the marriage in case of divorce isn’t a healthy agreement for either party to sign. One approach is to use your current individual net worths as part of the equation, perhaps setting aside the assets you entered the marriage with before dividing up the rest in some fair fashion. Remember, if you’re coming into this marriage with no net worth but big dreams of getting rich, a big part of you getting rich is the support of your partner, who has earned that stake because of the support provided.

Finally, look at your behavior and your partner’s behavior honestly. Are you engaging (or seriously considering engaging) in activities that would lead to divorce when you’re engaged? Is your partner? If you find it easy to engage in patterns that would lead to divorce while you’re seriously considering marriage, then your relationship has problems deep enough that you shouldn’t get married. In short, don’t ever put yourself in a situation where divorce looks likely.

What about children? The decision to have children is a complicated one and, in my opinion, is a very distinct one from the marriage question. Many of the concerns that men express about marriage tend to actually be concerns about becoming a father, and I think that becoming a father is a decision guys should never enter into lightly.

My opinion is that many people fear marriage for emotional reasons, but often find financial ones easier to state. Modern marriages usually are financially beneficial to both people involved.

I’ll certainly say that, in our case, marriage has been an enormous financial benefit. It was because of my wife’s stable job that I was able to make the leap to turning The Simple Dollar into a sustainable business, and it was because of that sustainable business that my wife was able to leave work for most of a year to be a stay-at-home mother. After all that, the only debt we have is our home mortgage. None of this would have happened without our marriage and the stability it has given us.

As I’ve mentioned a few times on The Simple Dollar, we use piggy banks and allowances with our young children in our home. We have a few simple rules that go along with this, mostly allowing them to freely spend part of their allowance while they save another part of their allowance for longer-term goals (and our oldest has a few other restrictions as well). The amounts we’re talking about are small – we give them fifty cents per week for each year old they are.

When we first started doing this, we expected our children would save for small goals. Since their allowances were on the order of $2, we assumed that they would set relatively modest goals out of a lack of patience.

Saving Big
Instead, they both took the opposite approach. Instead of saving for small items, both of our children chose to save for big items – or, to be more accurate, item lots that save them money per item.

Our son is a big fan of Dragonball Z (an animated series), but the action figures are a bit hard to find around here. Since he’s wanted to use his allowance to buy the action figures, we’ve had to turn to the internet to find figures for him.

While we were searching various sites for figures, I found that time and time again, he was more interested in buying a bundle of used figures over anything else. This was the best way for him to get a low per-figure price, even if the total cost was quite high.

The amazing part? He didn’t grow impatient with the process. He kept saving week after week for a big lot of used figures (with a requirement that two specific characters be a part of whatever lot he wound up with). Eventually, after saving for many, many weeks, he bought a six-figure used lot.

Interestingly, our daughter (who is a bit younger, only three) did almost the exact same thing with the princess dolls she’s enamored with. Rather than going to the store the first second she could afford anything, she waited because she understood that she would get more for her money by waiting. Similarly, she wound up purchasing a mixed lot of dolls at roughly the same time as our son’s action figure purchase.

The patience and willingness to bargain hunt exhibited by both children during this process impressed me greatly. I could not be happier with their progress in terms of setting goals and saving for them, particularly considering the children are five and three years old, respectively.

Making This Work
So, how did we get to this point? Here are some of the tactics we’ve used along the way to get our children on a good path for saving for the future.

“Do as I do“ We don’t have a practice of telling our children one thing, then doing another. We save for goals, too, and often do this visually right in front of the children. I actually have a savings jar that I put money in to save for a goal, and that jar will often sit for months, slowly accumulating money.

Very regular goal discussion We talk about goals of all kinds all the time. What do we want to accomplish this week? This month? Where do we want to be in a year? What are we saving for? All of these questions come up very regularly in discussions with our children. We share what we’re doing and encourage our children to do the same.

Visual money use As often as possible, we use money in a visual fashion. We pay their allowance in quarters. We allow them to swap quarters for dollar bills, so that they visually understand that connection. We also count the dollars they accumulate. The money doesn’t just disappear into a savings account or a checking account. Even on the occasions when we pay using a debit card or a credit card in front of the children, we immediately relate to them that the card is just telling the store that we will pay them the money later so that it’s easier to pay.

Minimizing focus on material acquisitions Our children don’t feel the need to have something new every week because we don’t put much of an emphasis on acquiring more material things. We already have lots of things to enjoy, so why should we have more? We’re far better off waiting around for something we genuinely want instead of spending money on an impulse.

Imaginative play As often as possible, we channel play in imaginative directions. We have a “dress up” tub that our children delve into for things to wear. Quite often, we’ll pull out building blocks and build something entirely new. We’ll make up games or play simplified versions of others (like the current favorite, “Dad Is a Zombie”). Such play doesn’t require material things – in the cases where material things are used, they’re incidental. Doing this as often as possible shows that fun and joy and the good things in life do not have to come from material items.

I can’t guarantee that my children will be financially sensible as adults, but I can be sure that I’m doing what I can to give them the tools to be financially sensible as adults.

This year for Christmas, most of the items my wife and I received were small and/or served some specific utility in our lives. I received some grape juice with which to make homemade wine (pinot noir), a replacement for our small saucepan, and some books (among other things). My wife received similar small items.

Our kids? Not so much.

Here’s the challenge with our children. My parents have traditionally gone way overboard on all of their grandchildren for birthdays and Christmas. On the other side of the family tree, our children are the first grandchildren of my mother- and father-in-law, and the first nieces and nephews of my sisters-in-law.

They all want to give our children memorable Christmas presents – and, frankly, I completely understand that. Our challenge comes in when we return home with all of these gifts and wonder where we’re going to put them all. They fill up multiple toyboxes and spread across the living room. The vast, vast majority of them are gifts from various events – birthdays and Christmases, mostly.

There’s a double challenge here.

The first challenge is simply finding the places to store these things. Our children are of three distinctly different ages and levels of cognitive development. Our oldest loves playing and building Lego sets, for example, and has a penchant for action figures. Our middle child loves building towers out of Magna-Tiles. Our youngest? He’s pretty content with a few stuffed animals and baby toys. As they grow, though, their interests change. Soon, our youngest will want to have his hand in the Magna-Tiles. And what if we have another child?

The second challenge is the implied lesson: teaching our children that less is more from an early age, that there’s great value in having a smaller number of toys that you play with extensively, that you don’t really need a mountain of toys. A mountain of toys stands in direct contrast to this lesson.

For us, the second challenge is perhaps more important than the first. The idea of having more stuff than you can possibly ever play with seems heavily tied to a sense of rampant consumerism as adults, where they buy more stuff than they possibly have time for. When you’re buying like that, you’re begging for financial difficulties.

Here are some of the solutions we’ve come up with for dealing with these concerns.

First, we’re starting to do “toy rotation.” Simply put, when the children are out of the house, we take a bunch of the toys at the bottom of the toybox and put them in a tub to store in the garage (temporarily). Occasionally, we’ll take some of the toys that are in storage and rotate them back into the mix, often pointing them out in a “Remember that toy? You haven’t played with that in a while” way.

Obviously, if they miss a toy that we’ve stored, we retrieve it for them. However, that hasn’t yet happened.

In the spring, we’re going to have a yard sale. Not only will we sell off almost everything in the garage tubs, we’ll involve the children in selecting toys that they’re willing to sell off. Our goal is to save a small number of toys for each child – the ones they enjoy the most – and sell off the rest of the toys.

The money from this yard sale – all of it – will go into a “family fun” pool which will pay for all of us to do something fun together (likely largely of the children’s choosing). Our best idea so far is to go to a water park that’s about two hours away from where we live, using the proceeds of the yard sale to pay for it.

In essence, we’re trying to turn excess “stuff” around our home into a fun family experience. The idea, of course, is that experiences trump stuff, and if stuff is just sitting around, it’s not an experience for you. It’s just dead weight that might as well be used in a better way.

We’re going to donate the yard sale leftovers to Goodwill. This way, once it’s decided that toys are going to go, they’re out of the house for good.

For now, though, as we look around our living room, we can’t help but notice the excess of kid’s stuff. Thankfully, now we have a plan for dealing with it.

For us, 2010 was a year of learning for both the parents and the children in our household about what allowance means, how it works, and what kinds of money lessons our children are learning.

Let’s roll back the clock to November 2009, when our children each received piggy banks and the allowance adventure got underway:

Our son received a Money Savvy Pig for his birthday, which has four slots to designate savings of various kinds. The bank featured a “spend” slot (you can spend that on whatever you want), a “save” slot (you’re saving up for a larger item), a “donate” slote (you’re donating that money to a charity), and an “invest” slot (you’re going to invest that in the future).

In order to minimize sibling rivalry, we gave his younger sister a single-slot piggy bank.

We decided to try a weekly allowance for each child, giving them each two quarters for each year of age they were. For the older son, we made a requirement that at least one quarter of his allowance had to go into each slot. The allowance was not tied directly to chores, but we occasionally gave them both opportunities to earn a few extra quarters through helping with chores that were above and beyond the usual household expectations for them.

What did we learn after a year of this? Did our children learn anything about money?

The younger one is a saver! Each week, our daughter would put her quarters into her bank and then put it back in the cabinet. We allowed her to decide when and how to spend the money inside, but almost without fail, she never wanted to spend it on anything. She likes that her bank is getting heavy. She has only used her allowance twice, both times on individual large toys, and neither time did it empty her bank. She doesn’t have any specific savings goals for the future at this point and seems to mostly enjoy having lots of quarters in her heavy bank, even though she understands she can use them for things that she wants.

The older one often lost focus on savings goals. Our son has no problem with the actual saving process. His problem is that he gets heavily into saving for specific goals, but by the time his savings starts to approach a goal, his interests have changed and he ends up having a new target for his savings. Thus, when he actually reaches a goal, it’s usually for an item that he’s just recently decided on.

He typically does not use his “spend” slot for small things, as he prefers to be patient and use it as part of his “savings” slot. He has expressed a desire to give the money in his “donate” slot to Jump for Joel, but that hasn’t occurred yet. The “invest” slot is going to eventually turn into a savings account at our local bank, perhaps around his sixth birthday.

Not using the allowance as a form of punishment or leverage has worked well. We want to establish that the basic things we expect from them around the house, like clearing the table after meals, basic politeness, and so on, are not tied to any form of compensation. Such basic behavior is expected. Their allowance is merely a tool to teach simple money management. Our children seem to respond better when there are not bribes involved – bribery works well the first time, but after that, would you really expect them to do that thing you want them to do without compensation?

The children anticipate allowance day. Typically, allowances are doled out on a Sunday, and both of our children anticipate it and request it. They’ll often ask on Saturday if that day is “allowance day” and an allowance request is usually out there by noon on Sunday. It doesn’t seem to be a money-grabbing thing; I think they just have fun putting the coins in their bank and then lifting them up to feel how heavy they are.

Our oldest child is starting to understand prices and what they mean. This not only builds on his allowance, but upon many of our discussions when shopping. He now understands that things have different prices and different costs. You have to spend more of yourself in order to acquire a more expensive item. Spend more of yourself? When you spend money, you’re really spending time and energy. In my son’s case, it’s time.

He doesn’t always ask how much it will cost; he often asks how many weeks he will have to save to pay for the item. He already has a basic understanding that money represents your invested time and effort. Money is simply a piece of paper that says I’ve invested a certain amount of time and energy in this. Deeply understanding that changes your relationship with money. It makes the money less abstract than before and much more real. It makes debt more frightening and good choices more appealing. Invested money, which earns interest, seems almost miraculous.

These are exactly the lessons we want them to learn from this allowance experiment. These are small, early steps, but they’re all signs that they’re heading down the right road, one that will put them in a place where they won’t repeat the money mistakes of their father.

Right off the bat, let’s take a peek at this “wonderful” new commercial by Toyota:

I was pointed to this ad by longtime reader Beth and the AutoAdOpolis blog.

If you’ve been reading The Simple Dollar for long, you’ll know that this ad takes a swing directly at a lot of different ideas I’ve shared over the years about parenting, money, materialism, and other things. I thought I’d run through them again in light of this ad.

First of all, if you’re a parent, your kids shouldn’t have any influence over your buying decisions. This commercial only really works if you believe that your kids should have any significant input over what automobile you purchase. If you’re letting your child have that much power, particularly in an effort to not seem “lame” to them, you’re abandoning your ability to actually be a parent to them.

Buying a car really can be a teachable moment. You should absolutely discuss why you’re buying a car and what your buying criteria are. However, what a child thinks of as a great criteria for a car (it’s shiny! it’s got a DVD player!) should have little or no direct bearing on that purchase.

At the same time, why is the father washing the car all alone out in the driveway while the kid is sitting inside alone? My kids – even my three year old – would have been out there washing the car with me. Why? That type of thing is the perfect opportunity to build a positive relationship with your child, the kind that fosters long-term trust and rapport.

I can understand parents and children both needing some solitary time. A child sitting alone inside while a parent is outside washing a car, though, is a perfect family time.

This, of course, might point to why the kid thinks his parents are “lame” – he doesn’t have a deep relationship with them.

The child also has no idea why their family has an older minivan or why that has value. Obviously, the family is saving money on a vehicle here – no payments, low insurance cost, and so on. That vehicle is obviously going to last for a long while because it’s being maintained.

That has value. That’s $500 a month that isn’t going towards payments on an expensive new car, let alone the insurance.

There’s no reason not to spell that out for your kids. The inherent value in buying and owning used things is because, quite often, their purchase price and maintenance costs are lower. That means you have money for other things, like a family vacation or the house you’re living in.

Yes, children won’t be able to fully understand that, but they should at least be aware of it so that such ideas are like an oversized glove that they will eventually grow into.

One last thought: if my child had a routine habit of calling the things we did “dorkiness,” referring to us as the “Geek family,” or directly calling his parents names, that child wouldn’t be headed out for a fun afternoon with his friends.

There are a lot of things you can’t control in life: your income level, the bad things that befall you, the financial largesse of the people around you, and so on. However, you can control your day-to-day choices, and among them is how involved you want to be as a parent and how involved you want to be in parenting your child (and parenting doesn’t mean “being their pal”).

Good parenting means teaching them not only how to behave, but how to be responsible and sensible with their money and time.

Some might say that I’m thinking too much about this commercial. However, the commercial is just loaded with things that would point a family away from good financial planning and parenting and towards some pretty awful choices. When such things are considered par for the course on television, there’s no wonder that some people consider it to simply be the way things are.

Melinda writes in:

My twelve year old daughter and I are having a money war of sorts. At the start of the school year last month we went shopping for clothes together. I said she could spend $250 any way she chose as long as she got a certain number of items – some underwear, some socks, some jeans, some shirts, and so on. I told her that she could spend more, but it would come out of her allowance. She proceeded to buy only the minimum amount of socks and underwear so she could buy another shirt that she liked. Now she’s having to do laundry twice a week and is complaining all the time about it. I told her to use her allowance to buy the underwear and she says that’s completely unfair. What do you think?

I think this is an experiment that had great intentions that went badly, but there are a lot of interesting pieces worth discussing in here.

First, I really like the idea of using this situation to teach your child about budgeting. In the end, that’s what’s going on here – good old fashioned budgeting. This experiment takes the concepts of budgeting and puts them into something concrete that the twelve year old can really understand and take part in. The idea of using additional money for budgeting

Second, I think you should buy her the necessary underwear and socks. This might surprise some of you because it’s obvious that the child made the mistake of spending that money on a shirt instead of the undergarments. The key thing to remember is that an obvious mistake to an adult isn’t an obvious mistake to a pre-teen, and forcing the child to get by on three or four undergarments is not exactly a great choice from a hygenic angle.

Instead, chalk this one up to a bit of a lesson learned for both of you. The idea is good, but the undergarment requirement from you as a parent should have been higher. If someone is required to do laundry twice a week because their undergarment count isn’t high enough, they should consider more undergarments. Not only will they last longer, but they’ll save on water and energy use by not requiring the user to run laundry loads with only a few items in it.

However, this question leads into a much broader one: what items should a child pay for out of their allowance – and what should their parents pay for?

While it may seem like a black-and-white rule for some, the line between the two can be extremely different from household to household. For example, in Melinda’s household, the child is being encouraged to spend their allowance on undergarments, whereas in my own household, this would never even be a question – we would buy such items for our children.

Where is that line?

For us, the rule of thumb is simple: the parents take care of basic needs, period. Basic needs means food, water, clothing, housing, school and field trip fees, and so forth. While our children remain at home before college, we will provide these things for them without any impact on their allowance.

However, we will often provide for just the basic needs. My children will always have clean clothes, but the shirts might just be generic t-shirts and denim jeans. My children will always have food, but that might come in the form of a sack lunch instead of $10 to spend at McDonalds.

Expenses for “wants” either come out of their allowance or are earned in some fashion. We give our children a small allowance each week that’s not tied to chores, but our oldest child now has the occasional opportunity to do more things to earn money. For example, if I’m out in the yard raking leaves and he spends an hour and a half filling trash bags with those leaves, I may give him a few dollars for his extra effort.

What about those “unexpected” situations? If something unexpected comes up, they may get a very small allowance advance to cover the minimum cost, but that’s all – and by minimum, I mean $3 if they’re going to stop at a fast food restaurant with some friends or something similar to that.

But I don’t want my child going without! Going “without” on small things is a valuable teaching tool. It teaches them that they can go without things that their friends have. It also teaches them the value of not spending their allowance all at once. (Of course, these lessons have to be coupled with involved parenting and discussion. That’s an assumed part of the equation.)

Remember, your job as a parent is not to be your child’s “pal.” It’s to take care of their basic needs while teaching them the skills they’ll need to survive outside of the relative safety of your home. One big part of that is personal finance, and lessons like these build that groundwork.