If you’re planning on starting your child on an allowance, here’s an idea on how to go about it from a post that has received a lot of attention and praise recently.
Blogger Brandon Stanton featured dad Steven Weiss and his two sons on the Humans of New York Facebook page on the resourceful way the family handles their kids’ allowances. The post now has over 800k likes and over 100k shares!
Speaking from the boys' perspective, the post reads, “Every week I get one dollar (around P46) for allowance. Then I get to choose the section where I put my dollar. There are four sections: spend, save, donate, and invest.”
For every dollar the boys place in the “invest section” they gets two extra pennies from their parents at the end of each month, mimicking the interest of real-life investments, and the boys are proud to say that they now have “way over $10 (P466)” in their ‘invest section’. “I used to have more but I took some money out and put it in my ‘donate section’,” the post continues. “We used to it to buy food for people who don’t have much money in their ‘spend section.’”
Isn’t that inspiring? The allowance system by Steven and his wife Rachel Feinerman not only teaches their children to be wise spenders, but it offers them practical lessons on how they can give back. It’s also an easy strategy to replicate at home.
Edric Mendoza, lead anchor of ANC On the Money, also teaches the importance of investing and giving back to his five kids. Instead of receiving allowances, however, they work for it. Elijah, 12, his oldest son, earns money by making stock reports. He researches, gathers data on the stock market, and submits his work every week. “If he submits his report late, he gets a lower fee,” Edric told SmartParenting.com.ph in an article. But, it’s not all about earning. “Elijah already tithes (gives a portion of his earnings to support the church) on his own,” he said.
Preacher and entrepreneur Bo Sanchez is the same. The dad-of-two says he and his two sons talk about money a lot at home. “They know why we should give tithes and invest for the future, and why entrepreneurship is fantastic,” he told SmartParenting.com.ph. Both of his kids, 15 and 10 years old, already have stock-market investments, too. “Benedict, who’s already working, gives 10 percent to God and 40 percent to his stock-market investments, and he manages the remaining 50 percent,” said Bo.
If your child isn’t ready for real-life investing, the Weiss family’s system is fantastic as an introduction to the fundamentals at a young age. Parents can also do the investing for their children, just like what Rose Fres Fausto, a money management coach, does for her kids. For parents who may be intimidated by the idea of stocks, Fausto recommends unit investment trust funds that you can invest in with just P10,000. “The best place to know more about it and where you can avail is your bank,” says Fausto.
Get more tips on how to raise kids with a healthy attitude towards money here.