My six-year old has been hounding me to buy her stuff:
- Pink iPhone
- Pink Mermaid Tail
- Pink Guitar
Rather than entering into a philosophical debate on consumerism with my kindergartener…
I decided to put her on the payroll.
We’re starting at $6 per week and I told her that she’d get a raise of $1 per week on her birthday.
$6 also makes the math easy for what I want to teach her.
I gave her three envelopes. I wrote on each…
My weekly recommendation was to save three dollars, spend two dollars and give one dollar away.
She asked if she had to do it my way.
Knowing that the purpose is to create ownership, embed good habits and learn from errors… I said it was up to her.
So far she’s saving 100%.
She asked if she had to do any extra work.
Hoping that a reasonable allowance might reduce lying and petty theft, I said that it didn’t rely on anything.
My wife felt that $6 per week was a lot. Looking at a CPI calculator, it’s the equivalent of $2.50 when my wife was six and $1.25 (!) when I was six.
Seems reasonable and the round numbers made it easy to introduce the concept of allocating income (Save, Spend, Give).
Saving half of everything I earned before 30 was the best financial decision of my life.
It will be interesting to see the unintended consequences.
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