Serious Financial Questions

I recently received an email from a friend with the subject line "serious financial questions." When I opened it up, here's what she asked:

1.  How much allowance (if any) did you get as a kid?

2.  How much did the tooth fairy give per tooth?

I thought it was funny! ;-)

When I was a kid -- somewhere around World War I (or so my kids think) -- I didn't get an allowance. Why would I -- I didn't do anything to earn one? (I literally didn't do much around the house other than mow the lawn.) I did have my own job starting from age 16 on though, so that's where I got my spending money.

And when I was little, the tooth fairy paid $0.25 per tooth. I remember trying to get a few extra teeth to fall out sooner so I could buy a new Hot Wheels car. ;-)

What about you? Did you get an allowance? What did the tooth fairy pay you?

Comments

[Anitra]

I'm a young'un, but I got an allowance of $2 starting around age 7, bumped up to $5 in highschool and my-age-per-week in college (delivered by direct deposit to my checking account - thanks Dad!) I occasionally did chores for extra money, and did yardwork for some neighbors. Didn't have a job until I my first summer in college.

The tooth fairy usually gave 25 cents, but I seem to remember getting a half-dollar under my pillow a few times.

[Blue]

I wonder if anyone's created a time-series dataset on these two topics. If so, we could theoretically create a Childhood wage inflation Index.

I got paid $1 a tooth in the late 80s/early 90s. I wonder if the tooth fairies hedging with euros nowadays...

[Josh]

I got an allowance of $15 each week. My parents told me that if I didn't spend the money they would add $1 each week I didn't spend it. That inspired me to save from a very young age.

[Simon]

Got $5 dollars a week in middle school and then $10 a week in high school.

Tooth fairy gave $1 per tooth!!

Didn't matter since I wasn't a big spender

[snow_drops]

If I get 100% on a quiz at school, I get $1. 90% and above earns me 50c. It sure motivated me to study.

Never heard of tooth fairy back home, so falling teeth did not contribute to my finances whatsoever. ^_^

[Tom]

We give our 6-year-old and 9-year-old kids a $2 per week allowance… but with a catch. They have 5 different banks sitting on their dressers, titled "ANYTIME", "LONGTERM", "COLLEGE", "CHRISTMAS", and "GIVING". Each week they split their $2 into the banks like this:

* ANYTIME: $0.50 cents. This is the money they can use for ANYTHING, any time they want. Candy? Go ahead. Toys? Fine. We do not control their spending on this, though we do advise from time to time. Logan, you want to get a $2 popsicle from the ice cream jingle-jip man as he drives down the street? Go ahead. It’s your money.

* LONGTERM: $0.50 cents. This is money they save up to buy something special for themselves; usually a big toy or something relatively expensive (from a kid’s perspective). They can pick anything they want, and then they put a picture of the thing in the bank along with how much they need to save up. Then they save in this bank for months until they have enough to buy the thing. Once my older son saved for a year and a half to buy this incredible $60 Star Wars toy he HAD to have. Again this is something THEY decide on and the only rule is that they have to save for it.

* COLLEGE: $0.50 cents. When this bank accumulates $20 or so we take the money out and put it into their ING account. When that gets to a couple hundred bucks we roll it into their UGMA or 529b. Lather, rinse, repeat.

* CHRISTMAS: $0.25 cents. The kids thought up this category on their own. They save all year long and use this money to buy personal Christmas presents for their siblings and for us their parents. I think they get a lot of pride using their “own” money in this way, and the gifts they pick out are all the more precious to my wife and I than the ones WE buy for the kids to give us.

* GIVING: $0.25 cents. This money goes into the offering plate at church. Or the Salvation Army kettle outside the grocery store, or maybe a relay-for-life pledge. We think this may be the most important of the five banks, as far a building a child’s character is concerned.

My suggestion to parents is do something like this with your kids from an early age. Make up your own categories. Use whatever percentages you’d like. When your kids are really young, use this to teach them the value of money. Use it help them learn how much coins are worth and how to make change. Start by handing them 8 quarters and have them drop them into the proper banks. Later give them dimes and nickels. After that, dollar bills so they have to learn to make change from one bank to put into the other. Give ‘em a $2 bill and really mess with their heads! Eventually, hand them a $10 or $20 bill and teach them how to break that. When they get monetary gifts as, say, birthday presents, have them split those proportionally as well. If you increase their allowance (my teenager had his allowance doubled to $4 last year) keep the percentages the same.

So do this and as your kids get older watch them learn that, yes, if you spend all your ANYTIME money on candy, you won’t have any left to buy ; a hands-on Finance101 lesson. Watch your older children learn that a neat way to get that special LONGTERM item sooner is to apply some of their ANYTIME money to it as well! Watch your older kids be amazed at how those quarters saved for college at age 4 – through the miracle of compounding interest, regular contributions, and investing - have turned into thousands of dollars for college by the time they are teen-agers.

And if you are really really lucky, some day maybe your child will say to you, like my 9 year old daughter did to me one day: “Dad we are taking donations at school for Susie’s family whose house got burnt in a fire, but I only have $0.25 left in my GIVING bank… is it ok if I take out $5 from my ANYTIME bank and use that also?”

“Yes Lauren, that would be perfectly fine.” ;-)

[Chris]

I got grades every quarter, so I got paid quarterly based on those grades. I can't remember for sure, but A's were $20, B's were $10, and Cs brought in nothing. So for me, that was about $70 a quarter, or $280 a year, or about $5 a week.

[That One Caveman]

My parents had a setup that I really agree with. In high school, I received bi-weekly allowance that was about twice the expected cost of school lunch. The other money was to be used to fuel my car and my own spending. Their belief was that if I did not work during the school year I would get better grades, which was the case. The flip side of that same coin is that I was required to have a job through the summer after I started driving because I was required to pay for the insurance for my car. Fortunately, I had a beat-up junker for a first car, so all I had to pay was liability, but even that was a lot for a 16 year-old. In college, I received a nominal allowance for the same reason as before - to not work during the school year. I don't remember the amount, but it was enough to buy some minor groceries when I needed.

Teeth were worth a dollar a piece in my house. I think I'll keep that tradition alive in mine with either giving a dollar coin or a 2 dollar bill. (I still have ALL of my 2 dollar bills that I was given for various occasions.)

[Edmund]

I'm in my 20s, and I never got any allowance. I was expected to help out with chores, but I didn't get paid for those.

I was told that I am part of the family. Therefore it was my responsibility to help out.

[Joey]

I seem to remember getting .25 for a tooth and .50/week allowance early on (late 70's). Later I mowed lawns and began working at 16 to earn "real" money.

Tom - great suggestion. We have three kids and the older two (also 6 and 9) get $10/month. I've tried to encourage them to save, but at that age, could not come up with a convincing reason why they needed to. Your system provides enough structure to teach them good lessons. Thanks!

[Becky]

I love Tom's idea! I just printed it out and am going to keep it for when my husband and I have children. Thank you!

I did not get an allowance growing up, but I did get $.25 or $.50 for a tooth. If I remember correctly, the bigger teeth were worth more than the little ones :) I'm not really sure why. If anything, the ones without fillings should have been worth more than the ones with fillings. Maybe then I would have drunk less soda and kool-aid!

[Becky]

Oh, I just thought of a question for Tom: At what age did you start the allowances?

[MattJ]

I had no allowance at all. I was expected to do many chores - keep the dishes clean, the trash taken out, the garage floor clean, the lawn mowed, my room clean (of course), etc.

Around the house for money, I could do extra work - vacuum the living room, clean the kitchen or bathroom floors, wash the bathtub, dust the living room furniture, etc. Each task had a cash value attached t it. A Saturday afternoon of work in the house could earn me $7-10 or so. Oddly, I didn't do any laundry until I moved out after high school.

In addition, my stepfather was a contractor, and I did age-appropriate work for him at his job sites. Sweeping, picking up trash, hauling sand or water in buckets, digging sump holes or fence post holes, mowing his rental property and occasionally a house he had built that had been for sale long enough for the yard to need it. I'm pretty sure he saved some of the more physically demanding tasks for me specifically so I could learn the value of hard work. He started me off at $1/hour when he and my mother married (I was 8) and by 14 I as making more than minimum wage. My mother just enforced a rule that I couldn't work more than 40 hours a month for him, at least until my friends started getting jobs.

I really don't remember what I got for my teeth. I seem to recall thinking that it wasn't much, but maybe that's because I always had money.

[Ashley]

I'm 23 and I didn't get any allowance until about 8th grade - and it was random - so I don't know that I would call it allowance. (Sometimes I would get $5 a week, sometimes $5 a month and that only lasted a few years).

As for teeth though, I got $1 per tooth. Oh, and until high school I got $1 per A on my report card.

[Stormy]

I got $1/week allowance starting around first grade and $1/tooth from the tooth fairy.

My seven year old stepson gets $1/week at both houses and $1/tooth from the tooth fairy. I think the tooth fairy is being a bit cheap since he gave me a $1/tooth over 25 years ago!