Teach children to save by using this one small tweak that worked for Mama Bear Myown and her 14-year old son, Spike.
The first Friday of the month is a very intriguing one for 14-year old Spike. He gets paid $100, which represents his entire months’ allowance.
His mother, Myown, says, “I put it in his bank account the first Friday of the month like a payday and he has a bank card. So he can go to the bank or use the card out like an adult because he's almost one.”
This once-a-month allowance system was going great for them. Except there was only one problem: it wasn’t getting across the money lesson his mother wanted to teach her son.
Pssst: looking for a really unique, engaging way to teach kids to save money? Be sure to check out my Mt. Everest Money Simulation by clicking the image below.
Money Behavior this Mama Bear Wanted to Change
In her mind, this meant saving money from one month to the next without spending it on something frivolous – a bit a stretch-goal when your teen is just starting to work out their delayed gratification muscle.
And Spike just wasn't getting there with their current allowance system.
With that $100, Myown expected Spike to pay for extras such as bowling + movies with his friends, and facial wash. But bridging that gap between paying for an $8.00 movie ticket + $4.50 hot dog all the way to paying for $55 new shoes is where she was having trouble.
Her money behavior she wanted to change: “I'm trying to teach our teen about saving his money instead of just spending it as soon as he gets some. For example he get $100/month for things to pay for such as his bowling, movies, and facial wash (items that he needs and then things that he often likes to do with his friends). Saving towards something big like (new shoes that are coming out or new laptop) instead of feeling like he has to spend the money on eating out or picking up something he doesn't need.”
The Tweak to Myown's Allowance System that Yielded Impressive Results
Bridging that money gap between one month to the next is actually a hard concept for many adults to get, let alone kids.
So instead of starting with that big-kahuna goal, I asked Myown to scale back on both her expectation as well as her allowance.
Solution: Divide her $100/month allowance into two, and give it twice per month, just like a bi-weekly paycheck.
Of course, savings in this sense will only be on a two-week time table, but it sounds like he needs to start on short-term savings goals before moving onto bigger ones.
It's what I like to call time releasing your money, and I've recommended it to adults for years. The good news? It can work for kids as well.
Spike’s Progress, Two Months Later
I reached out to Myown two months from our initial talk to see how things were going and if she had used my idea.
Myown said that she is using the solution, and “…he's actually using his money less. I also let him keep an account of his own money so juggles it better. For example he saved his money so he could buy his brothers and us Christmas gifts from himself. He was so excited that he made the purchases with his own money.”
She took things a step further, and “…tried the item with finding a goal of something he wants to purchase and making that his screen shot. Then when he thinks of spending his money on frivolous items he sees that and changes his mind. Right now, his goal is man uggz.”
Spike has been offered a spot in his high school’s finance program as well, which has the nation’s only student-run stock room. So he’s stoked about that. He’s also decided to begin designing tshirts to sell. Since Myown owns her own business, she’s walking him the steps of how to set up his own shop online.
Myown says, “Thank you so much. I want him to be able to handle his own finances when he leaves for school.”
Pssst: looking for a really unique, engaging way to teach your child to save money? Be sure to check out my Mt. Everest Money Simulation by clicking the image below.