Money Management and Consequences for a First Grader

Nicholas has been getting an allowance since he turned five years old, almost two years ago.  He does not get the “$1 per year of age, per week” recommended by many parenting magazines–that’s crazy!  I use the method my father taught me of dividing the money into Spend, Save, and Share categories:  Nicholas gets 50 cents to Spend on anything he wants, 25 cents to Save toward the occasional big purchase, and 10 cents to Share in the collection plate at church or other charitable causes.  That’s not a lot of money, but it’s supplemented by occasional gifts from relatives–and often, several weeks go by when Nicholas doesn’t feel like buying anything.

We realize, though, that such a tiny income does not cover many of the special things life has to offer a first grader.  His school sells ice cream every other Friday (with profits going to the PTO), and I routinely give him the dollar for that in addition to his allowance.  When a flyer came home announcing the school book fair, I agreed to put some money toward that, knowing that a single brand-new paperback would cost at least his whole month’s income.

Unfortunately, the weekend and Monday night before the book fair were so busy that I completely forgot to sit down with Nicholas and the flyer to decide what he would buy.  As we approached the school entrance last Tuesday morning and saw the book fair banner, Nicholas remembered that this was his class’s library day, “. . . so can you loan me some money, Mama?  Because I really want to buy a book when I’m with my class, instead of going to the book fair with Daddy after school.”

I agreed, but when I opened my wallet, I found that I had only $20 bills.  After some debate, we agreed that Nicholas would put the $20 in his pants pocket with the Velcro closure and be very careful not to misplace it, he would buy no more than 2 books, and he would put the change in that pocket and be very careful not to misplace it.  I was a little nervous and repeatedly emphasized that this was a lot of money and I expected him to use it wisely.

When I got home from work that evening, Nicholas carefully handed me $11.44 and a receipt.  Great!  I praised his responsibility.  Then I asked him to show me his new books.

He had a slim paperback book about a dolphin who lost its tail in an accident and got a prosthetic tail.  He also had a cheap plastic wand with a pointing Mickey Mouse glove on the end.

MAMA: What?!  I said you could buy two books.  That’s not a book!
NICK: But I wanted to buy this.  I bought one last year.  It was only $4.
MAMA: That’s not worth $4!  And you already have one!  I wouldn’t have let you get that if I had been with you.  I gave you money for books.
NICK: Oh . . . well . . . so should I pay you back for half?
MAMA: You will pay me back for all of it.  $4.

I did feel that maybe I was being a bit harsh.  $4 is eight weeks of his spending money!  But it was absolutely true that I had intended the money to be for books, not toys, and that he was lucky to get any bonus money for the book fair since he already has a whole lot of books.

Nicholas opened his Spend bank and found that he had only $1 amid a lot of fake pirate coins, and at that point his father recalled that Nicholas owed him $1 for something purchased when they were in a store together.  Nicholas handed over $1 to his father.  He opened his Save bank.  It contained 68 cents.

I told Nicholas to keep the 68 cents toward his next savings goal.  I will be paid back for the Mickey wand by keeping the money I would have given him to Spend until it adds up to $4.  I explained that this will take eight weeks, which is two months, and that in that time he can think about whether the Mickey wand really is so great that it is worth having no spending money for two months.

I wrote, “Nicholas owes me $4.00.” on a piece of paper and taped it next to my calendar.  After giving him his allowance (Save and Share money) on Thursday, I showed him how I was crossing out $4.00 and writing $3.50.

Nicholas has had some trouble understanding how he is paying me back with no actual coins changing hands.  I would have given him the 50 cents and had him hand it back to me, but I happened not to have enough change available.  Instead I explained again that by not paying him the 50 cents, I have 50 cents more total money than I otherwise would have.

I haven’t seen him playing with the Mickey wand–he only played with last year’s Mickey wand a few times, that I’ve seen, and I’m not sure he even knows where either of them is now.  It’s a useless kind of toy.  I can’t understand why he wanted the first one, let alone two of them.  I’m really glad I refused to be talked into paying for it.

But am I being mean by withholding the spending money for a period of time that is going to seem endless to such a young child?

You know, Nicholas gets very upset about a lot of things.  Last week, he did quite a bit of self-righteous hollering about how he shouldn’t have to help pick up the living and dining rooms, which were overwhelmed with a mess 90% of his making, and then when he found that his dad had cleaned it up, he threw an enormous shrieking fit!  But he’s had little complaint about owing me this money.  He’s asked questions about exactly how the repayment plan works, but he quit disputing the need to repay me after about two minutes of weak protest.  He seems to understand that I trusted him to buy books and bring me the change, and therefore he is responsible for his decision to spend some of the money on a toy.

Last night, I was thinking about how buying music files electronically is kind of like buying 45rpm records when I was a teenager–you might hear the song once and decide you’d like to be able to hear it again any time you want, and you can buy that experience for a small price.  (The 45, of course, always came with another song on the B side–which might be a delightful bonus or might be something you’d play once and try to forget!)  Those records were typically priced at $2 in the ’80s, and I did regard that as a low price, but when I first started buying them $2 was my entire week’s spending money.  It was a commitment!  Did I really want to play “Walk Like an Egyptian” over and over again so much that I was willing to do without chewing gum or new eye shadow for a week and to give up the possibility of being able to afford to go to a movie next week?  (Yes!  I still like that song–and I still have that record!)  It wasn’t until I was bringing in frequent babysitting income, in addition to my allowance, that shelling out $2 for a record became a decision I could make casually because it was only one hour’s wages!

I want my child to have that same kind of experience.  I want him to feel poor until his own earnings make him feel rich by comparison, and to think carefully about what he chooses to buy.

One thought on “Money Management and Consequences for a First Grader

  1. I have an almost 6 year old. We are starting to give her an allowance. It started when she came to us over the summer asking for a ‘build a bear’, which I think are about $25-30. I told her that she could earn money by doing chores and buy one herself and she seemed very motivated by that, depending on the week.

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