Help a Reader: Divorce, Kids, and Money

Here's an email I recently received from a reader:

My situation is this:  I am divorced (and remarried).  I have one child with my ex and he spends roughly 6 out of every 14 days with me.  I am trying to get an allowance payment system established that will teach him about money management, saving, charity, and responsible money habits (I never got that and have paid the price for it).  I have read a lot on your blog about requiring that they split their money amongst several "accounts" for long term saving, short term spending, and charity and I love the idea. 

My problem is this:  I have tried that and it worked well, but because we don't see him on a regular basis, the allowance seems to slip through the cracks.  Then after several weeks, I end up having to pay him back allowance.  I have tried creating a task sheet that provides a monetary value for certain chores, but, again, because we don't see him regularly, WE end up having to do things like take out the garbage and the like.  The other problem with that is that he will come back and tell me he doesn't need money and therefore doesn't need to do chores (BACKFIRE!)  I have also tried to let his school be his "job" as well as being respectful, honest, and give effort, then he gets his allowance.  But, again, the consistency thing keeps getting in the way. 

I would love to hear from your readers who may be in the same situation and what they are doing.  Heck!  Any suggestions at this point will help.

Anyone out there been in a similar situation and had success?

Comments

[Chris]

When I was growing up, I was expected to do chores because it was my house too, and my allowance came quarterly based on a formula from my grades. As were $20, Bs $10, Cs $0 Ds -$20. Or something like that. I got As and Bs so it would be something like $100 a quarter. This did several things:

1) household stuff was just something to do, not to be considered work.
2) Getting lump sums meant that I could blow it all now, or save it and spread it out.
3) it is easier to pay out 4 times rather than ever week/2 weeks.
4) incentive to bump that B+ up a few points.

On average, it worked out to about $7.50 a week.

[Norma]

Oh yes...the old allowance discussion. Two years ago my darling stepson came to live with us. We implemented chores and the allowance system. Money was not a good motivator to get him to work. His dad explained to him that if he didn't want to do extra around the house or if he did a terrible job he would be fired. After two weeks Dan lost his first job...Fired by his father. Now, at 16, the child has figured out that those jobs are a piece of cake. He does them happily and without prompting. What changed...maturity on his part. Don't get too worked up about the whole process. If he wants money tell him you'll find him a job and he can earn it. My bet is he sits on the couch on his fanny and does without till he's ready. Dan is saving, giving and spending just like one would hope.

[rwh]

My oldest daughter is in 10th grade. She gets $10/week allowance and we make her save $1. We don't make her save money she gets at Christmas and birthdays. We give her $50 for making a 3.0 gpa (which has always happened) and $100 for a 4.0 (which has never happened). We don't consider it an incentive because she tries hard. It's more of a reward.

She works during the summers and saves at least 1/3.

She may work a little her junior and senior years but she is involved in sports and music and has very little free time. She's on the go a lot, and has mountains of homework.

We're considering raising her allowance to $20/week with the stipulation she has to take a larger burden of paying her own expenses, such as clothing and entertainment. We would still get her things required for school, such as sports equipment and orchestra outfits. And, of course there are always holidays and birthdays.

Our goal is to give her more financial training by giving her the responsibility of managing more money. She'll go away to college in two years (man I'm going to miss her....). And we think she could profit by learning to budget her money as well as she budgets her time.

She does chores around the house and is an all around good kid.

I'm interested in what others think. Is this plan reasonable, or are we "indulging" her?

[grb]

I pay my kids everytime I get paid. This is a collary to 'paying yourself first'. In fact, I pay both my wife and I an allowance too at the same time. Eveyone gets allowance. It's been great for everyone to have some personal money.

Kids get an amount equal to their age minus two, so every year everyone gets a 'raise'. It's pretty arbitrary, but it's worked pretty well. This allowance system is not tied at all to domestic responsibilities. Just living in a house and being part of a family comes with domestic responsibilities - nothing to do with allowance. The purpose of our allowance is to foster financial experience.

We encourage spending, saving, and giving. Spending doesn't need any encouragement. Saving and giving are another matter. We don't require either, but verbally encourage it and try to lead by example. When my kids ask for a line of credit on their allowance, I reply "when I see evidence of saving and giving, I'll consider it".

[Brandon]

Caveat: I do not have kids yet.

Also, from the original post, I couldn't tell if you were the mom or dad. I am assuming dad for this post since I am a guy. Sorry if I am wrong.

In your situation, I would focus on the money management aspect and create a disconnect between money and chores since he is not around regularly enough to do them in a timely manner.

1. I would teach him that some chores are expected and if he does not do them, he will be in trouble. I don't know what terms you are on with your ex-wife, but you really should speak with her about this if you can in order for this sort of thing to be consistent. The last thing you want to hear is "I want to go home. Mom doesn't make me do dishes."

2. For other chores that are not expected, I would consider giving a financial incentive for help. If he says he doesn't need money, don't get mad, don't make him do it, just don't pay him.

3. If the goal is monetary management rather than as an incentive to do chores (which it very well can be if the above two guidelines are followed), then you should try to find a schedule that you can keep. I would suggest maybe every other week or once a month. It mostly depends on what the pattern of your custody arrangement is.

All that said, I cannot imagine every saying as a kid "I don't need money"

[Brandon]

I had a thoughts after I posted:

You should also try to be consistent with your allowance ideas with your former spouse. Again, this only works if you two are on speaking terms :)

[Brandon]

rwh: I think you are giving her a reasonable allowance currently. It sounds a lot better than just doling out money at all times for entertainment, etc. If you bump up her allowance with the stipulation that she has to pay more of her clothing/entertainment expenses then I believe you should spend some time accessing how much you guys currently spend on her clothing and entertainment to make sure that $20 a week would be enough. I mean, it really SHOULD be enough, but she may get upset about it if she feels like she can't support her former lifestyle when it is on 'her dime'. I don't know her personally obviously, but in general you also will deal with the possibility that she will buy something you might not approve of.

[Judy]

I am also living apart from my children's dad. I give each of my children their age in dollars each week. (So does their dad.) Instead of handing them cash, I transfer their allowance into their savings accounts on the last day of each month. Because their accounts are linked to mine, they can request that I use my debit card to purchase an item, knowing we can go home and transfer money from their account to mine. They are 9 and 12 years old. Their main "job" is school. The work of children is school. They are also adding new chores to their responsibilities each year. They have to do their chores because they must be contributing members of the household. Not to "earn" their allowance. I give them the allowance. Letting your children know they must contribute effort to the wellbeing of the household, instead of tying it to an allowance, will help prepare them to be contributing members of the community as they become adults.

[Stefanie]

Depending on the age of your child, you may want to consider a prepaid credit card. Our daughters each received them for their 13th birthdays. We add their allowance monthly through an automatic transfer. An email with a reminder to spend wisely is generated automatically by USAA (there are other similar programs out there) when the money is transferred into their account. The cards have taught them many things. At 13, signing their names was a bit intimidating, so they were more cautious about their purchases. They know that when they make a purchase the piece of plastic is only worth the amount of money in the account. Having a credit card with their name printed on it is pretty cool, but they also have to keep track of it. They are able to use an ATM to get cash; again, the money has to be there. We do give them some cash, but since they are often cash poor they have been more motivated to babysit. Also, their grandparents are able to give them gifts online so checks or gift cards don't have to be mailed. You do not have to be a member of the armed forces to join USAA. We qualify because my husband's father was in the military. Here's a link to their website. https://www.usaa.com/inet/ent_utils/McStaticPages?key=youth_prepaid_spending_card_main

Another way we taught the girls the value of money was to NOT buy them everything they wanted. They both saved money from gifts and odd jobs over a period of several months for American Girl dolls. They really did not play with them that much, but they were proud of the fact that they had paid with their own money. Recently (5 years after purchase) one of the girls told me that her doll was really overpriced. Had we made those purchases, they would never have had the satisfaction of choosing what they wanted and paying for it, finding that having the doll was special but not a lasting pleasure for her, and that some things cost more than their overall benefit. Those are lessons a gift or an entitlement could not teach. As I tell the girls, that's life economics! Then they roll their teenage eyes.

[Robyn]

Not sure if this helps the original poster or not but on the topic of saving we do something a bit different.

When my girls receive money whether from jobs they do or as a gift they give me the amount they want to save. I then deposit this into their savings account and match the amount.

Once they have saved a certain amount we sit down together and pick a stock or mutual fund and buy that in their 529 account. We are on our first one for the 8 yr old and our second one for the 10 yr old.

This has worked better than I could have ever imagined. My oldest spends very little and most goes to her savings account with the match. My little one usually spends about 50% and then hands me the rest to put in her account.

It really surprises people when they open a card with money it and hand it right to me and say, "Please put this in the bank."

They rarely ask for things and if they do decide the want something they usually buy it with the money they didn't put into the savings account or figure out a way to earn the money they need.

[Canadian]

When I was growing up my parents did not tie my allowance to chores. I had to do chores because I was a member of the family and everyone had pitch in. I had my regular chores to do and I did them. I got a small allowance which was divided between saving (I chose what to save for), spending, gifts (kids get invited to lots of birthday parties), and church giving/Brownie dues. If I ever wanted more money there were extra chores which could earn a token amount of money. These were special projects, spring cleaning type things, not the regular functioning of the household things. When I was a teenager and wanted braces (my teeth were crooked but it was not severe) and it was not in the budget, my parents pointed out that my mother would have to work extra hours to cover them, so I would have to help out by doing some of the housework my mother normally did. I chose to do the family's laundry, which took me a few hours every Saturday.

It worked well for me (this was in the 1980s, early 1990s). I don't know whether it would work for all kids or not.