1st Purchase
This past Monday Aubrey made her very 1st purchase with money she's earned "working" around the house!Let's back up to see how it all started....One of the best conferences I've attended was held at our church last year- "Raising Financially Healthy Kids". As is evident by much of the economic stress occurring currently, not everyone has the healthiest approach or relationship with money.
As a family, Rudy and I work to model financially responsible principles. Though we felt we were on a good track before the conference, A LOT was learned during the conference as to what we could do to model this more effectively for Aubrey and Benjamin- where it's who we are, not just what we do.
Anyhow, 1 of the 8 Keys presented was focused on teaching kids how to survive in the financial world. In this section it focuses heavily on work and allowances before kids are legally able to obtain their own paycheck.
Rudy and I had been discussing prior to the conference when to start allowing Aubrey to begin earning her own money. She is at the age where she wants a lot of things she sees but we don't feel like those items need to be purchased "just because".
Through what we learned, we settled on the "Commission Method" allowance and began it after she turned 4 at the beginning of this year. Pay is based on the performance. It's not guaranteed.
So we sat down and created a list of 4 jobs (# of jobs= age) that are above and beyond the expectations we have for being a member of the family (i.e.- it's expected as a family member we all keep our rooms clean).
Aubrey's 4 Jobs:
1- Set the Table (Though we eat dinner as a family at the table, setting it wasn't a necessity so having it set it created a job for Aubrey.)
2- Cleaning the Table
3- Putting away her laundry
4- Cleaning the spare bedroom
Each chore is worth $0.10/each. She has the potential to earn as much as she wants based on what she's willing to do. On average, she earns about $1.40/ week. If she doesn't work- she doesn't get paid. She's really grasping this concept. She likes earning money!
Since it's the commission style, she also has the opportunity to up to a $1.00 bonus for the week. We've established some bigger jobs that are reserved for us as parents but if she helps she earns an extra $0.25/per chore- not to exceed $1.00 week.
Examples of Bonus Jobs:
1- Watering garden
2- Watering plant beds
3- Helping weed
4- Helping wash car
5- Helping with any large outdoor projects (ex- mulching)
Aubrey's payday is Sunday. With receiving pay, we're also teaching her what to do with her money. There are 3 banks on her dresser representing the 3 areas she needs to deposit her money:
1st Bank- Giving Back to God- we ask that she gives at least 10% to this bank. She rarely gives that little. We hope this approach to generosity sticks with her during her whole life! At church, the tithes from the kids go toward purchasing a Cow for the village the church supports in Uganda. She gets SO excited to deposit money in this bank and to give it each weekend!
2nd Bank- Savings- we ask that she saves at least another 10%. Again, rarely is it ever that low. She understands this money being saved is for college.
3rd Bank- Spending- the rest of the money is hers to spend on whatever she wants. Since she doesn't make a lot in a week, her spending money needs to be saved in the bank until she has enough to buy what she wants.
She's been saving her money to buy a Polly Pocket. As of Monday (5/18) she had $8.00 in her spending account. So, off Target we went to buy a Polly Pocket. The Polly Pocket was only $4.99 so that allowed her to pick out more than 1 toy, much to her delight. She bought a miniature Tinkerbell toy.
The goal is a 10-10-80 model.
She had a blast picking out her toys giving the clerk her OWN money. She's also taking very great care of these toys. She's not destructive with her others but you can tell there is something special about these since they are the ones she bought.
Here are some pictures from her very first purchase!
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I love it! I really hope that we can get as organized with our kids.
Tara Alamilla said... May 28, 2009 at 4:24 PM
Great idea and follow through on the commission set-up. I want to share this idea with my girlfriend. She has a 4 and 6 yr old. When I was a financial planner I thought a lot about how people really didn't know how to balance their financial responsibilites. I think if more parents did this and demonstrated with their own behavior, our country would be a lot better off! Thanks for sharing!!
Amanda Berkey said... June 6, 2009 at 4:01 PM
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