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Book Review: The 4 Little Pigs

November 25th, 2008 ·

The 4 Little Pigs is a children’s book designed to teach little ones the basics of budgeting. The author Jeanette Ramnarine, who has two young children of her own, believes that children should be taught the basics of handling money wisely. In this book, young Caleb receives four little piggy banks labelled Saving, Spending, Sharing and Schooling and learns to divide his weekly allowance between the piggies. The book and a set of four piggy banks are available through the author’s website.

I read the book to our 3-year old boys who have a tenuous grasp of the concept of money, let alone dividing it and they were far more interested in the pictures. I’m guessing that the book will appeal to kids who are at least a couple of years older.

Interestingly, the book suggests giving a child an allowance of one dollar per year of their life starting at three. We don’t give our kids any allowance for very good reasons: they’ll treat it as a shiny toy and throw it around, put it in interesting places like heating ducts or lose it in their daycare. Do other parents really start an allowance for such young children?

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18 responses so far ↓

  • 1 Anjo // Nov 26, 2008 at 12:40 am

    Good question. We have a little guy approaching three years old and have decided he is too young for an allowance. He will have to deal with money for the rest of his life, why not another year without it. I could see age four or five being appropriate as kids get a better grasp on numbers.

    A question for you and others, do you think a dollar a week for each year of age is too much (or too little)? I have heard fifty cents a week suggested by others. I suppose when you add additional elements like saving and charitable donations, a buck a week for each year of age may be appropriate.

  • 2 Reformed Spender // Nov 26, 2008 at 2:10 am

    Is that weekly or monthly?

  • 3 Traciatim // Nov 26, 2008 at 9:20 am

    I’ve always like the idea of when a child starts school they should get an allowance equal to their age every two weeks (or every week if you can spare the cash). If they want more money than this in high school they can get a job and help towards some of the expenses.

  • 4 Four Pillars // Nov 26, 2008 at 10:11 am

    I don’t have a clue how much allowances should be but I do know that rule of thumbs are pretty useless here as they are with most finances.

    I agree with CC - kids up to a certain age don’t need any allowance at all. Even when they start getting allowance it might make more sense for the parents to keep it for them so it doesn’t get lost at the playground.

  • 5 Money Minder // Nov 26, 2008 at 10:40 am

    We follow the $1 per year of age rule. It didn’t make sense to start giving allowance until my daughter started asking for money (age 6). Once she started asking for money, we gave her 3 piggy banks (sharing, long term savings, short term savings) and a wallet for her spending money. She gets her allowance each Monday and divvies it up. To make it relevant, we have made her responsible for one of her own spending categories. We spend a fair bit of time in hockey rinks and she always wants to buy food at the snack bar (instead of the food I bring from home) so it is her responsibility to budget her spending money to pay for snack bar food. My son who is 3 also gets allowance but only because he knows his sister is getting one and wants equal treatment. His goes straight to the piggy banks with no spending allotment.

  • 6 Dividend Growth Investor // Nov 26, 2008 at 10:44 am

    Looks interesting. I want to ask if MDJ and Canadian Capitalist are written by two different people or the same person? The topics today are pretty similar between the two.

  • 7 Derek // Nov 26, 2008 at 10:52 am

    My personal finance professor at the University of Calgary, Larry Wood, presented a similar rule of thumb of $1 for each year of age, but he included several more components:
    - withholdings at source for income tax
    - deduction for living expense
    - 10 percent into savings account

    While the allowance for a 9-year-old looked like $9 on paper, the “take-home” amount was more like $5. If the child filed a tax return with his parents at the end of the year, he or she could receive a refund. I thought this was a fairly complicated (and possibly unsustainable) way of running things, but it has a certain appeal.

    My son isn’t even 2 yet, so we aren’t too worried about allowances yet. Perhaps once he is 8 or so.

  • 8 Jason B // Nov 26, 2008 at 11:51 am

    My parents gave me an allowance, but for a while they did not give me cash. They kept a post it note on the fridge with my balance. If I wanted to buy something, they’d buy it for me and they deducted it from my balance.

  • 9 Novice // Nov 26, 2008 at 12:14 pm

    I have a one year old son and was thinking about this topic too. I think starting school / asking for it is the right age (I can’t help but assume they’re related).

    I like the idea of $1 per year of age too, every week (or at age 7, that’s $364). I will also mandate saving of 10%. But also I’ll expect him to give to charity which no one else has mentioned yet. I think what I’ll do is expect him to save 10%, give 10% year to charity (I’ll submit to get a tax receipt but give him an extra $5 for doing so, it’s only fair if I’m taking a tax benefit he paid for) and spend the rest.

    The hardest part will be to not give him more when he wants some, ie he gets it Sunday night but spent all his money on friday and wants to go to the arcade with his friends on Saturday but has no money.

    Bigger question - is the allowance “condition free” or conditional based on certain tasks? ie cleaning the table, washing dishes, etc. I think it’s important he understand there are jobs that must be done just to be a functioning family.

  • 10 Money Minder // Nov 26, 2008 at 12:31 pm

    Novice: we mandate a portion of their allowance go to sharing (donations) they can choose to which cause. We do not tie allowance to chores around the house (lots of parents will disagree) because chores are part of being in a family. I am a full-time Mom and no one pays me for chores. We currently divide up the allowance evenly between saving/spending/sharing. It makes the math easier for my young children. We will discuss more realistic allocations when they are older and are made responsible for more of their own spending categories. I also give them their allowance in small denominations so the division into equal parts is easier.

  • 11 Rico // Nov 26, 2008 at 12:33 pm

    I visited the website and love the colours. We have placed an order for the book and can’t wait to give it as a stocking stuffer. I give my kids a weekly allowance following the same principle of dividing it between piggy banks. At an early age it is more about the novelty of having money and depositing it into their piggy banks than the actual concept. I do not let them play with it. Routinely when I give my kids their allowance, I say why we are dividing the money and the significance in my 10 second blurb. They have quickly grasped this and the novelty is still there but there is a greater association of value and ownership. At first I thought it was going to be a lot of money, but we buy our kids stuff anyways. Basically I have now transferred the purchase ownership to my kids. If we are out shopping and they want a small ticket item, I ask them if they have brought their spending money. If they haven’t, I indicate that they should bring their money next time to buy it. This alleviates them whining about always wanting something when we go out. One of the best feelings is watching my children make purchases and count out their money (with help) during a purchase and see the excitement on their faces. Also, with some of their cheaper purchases that break on the way home, they now do a little more inspecting of their toy prior to finally making a buying decision.

  • 12 Canadian Capitalist // Nov 26, 2008 at 12:35 pm

    Reformed Spender: I think that would be weekly but the book doesn’t explicitly say that.

    DGI: Nope. Sometimes, you do find posts on the same topic. I assure you it is a coincidence :)

    Novice: The book classifies charity under “Sharing”. I agree with you that kids should pitch in with house work. Our kids already understand the concept of quid pro quo, so they should understand that allowance could be cut if they behave badly!

    I’m glad to hear a lot of you think school age is appropriate for starting an allowance as well.

  • 13 Novice // Nov 26, 2008 at 1:51 pm

    MM & CC: So allowance is conditional then on behavior? If my son misbehaves is an approporiate punishment then to withhold his allowance that week? It’s confusing Thankfully I’m about 6 years away from such trouble.

  • 14 Dividend Growth Investor // Nov 26, 2008 at 2:16 pm

    CC,

    I think that you and FT have a lot in common since you often get to write about similar subjects. Anyways, like the blog. Teaching kids about money is important.. It might even prevent them from ever taking on a mortgage on a house they can’t afford..

  • 15 4 Piggies // Nov 26, 2008 at 2:59 pm

    Being the author of “The 4 Little Pigs”, I enjoyed reading through all the comments made thus far. To clarify some of the confusion, the book was written based on our family’s experience of giving my son Caleb four piggy banks named Spending (pocket money), Saving (for a bigger purchase), Sharing (to be used to help others) and Schooling (savings for post-secondary education). He was born in December and started school when he was 3 years old and we started introducing him to the concept of money through an allowance at this time. I am a music teacher who has worked with children in the age range of 3 – 8 for 13 years and have know that the earlier you begin teaching children certain skills, the more they retain these skills and will use them as adults. Caleb loved the novelty of collecting the coins in his piggy banks each week and learned a lot from ages 3 – 4 about coin value and numeracy. It was fun for him to count the coins and watch them add up in the piggy banks. Our story shares what Caleb did with the money from each of his piggy banks. He learned a lot not just about money but developed other skills such as numeracy, delayed gratification and character development (through use of his Sharing piggy bank). In my case we don’t tie our children’s allowance to chores around the house (it’s expected of them because they are part of a family) and it is not conditional on their behavior (we use other consequences for bad behavior). I am using their allowance as a teaching tool to prepare them to be financially responsible now so that they will be able to use this skill throughout their lifetime. Our website at http://www.fourpiggies.com has more information on our story and pictures from the book “The 4 Little Pigs”.

  • 16 Poedin // Nov 26, 2008 at 3:12 pm

    In discussions with our 8 year daughter, she thought that her newspaper route would be the best “revenue stream”; however, her grandma insists on giving her cash along with other gift items. Grandma’s does not know how to hold back …
    Chores are part of a family’s responsibility.

  • 17 Money Minder // Nov 26, 2008 at 4:15 pm

    Novice: We don’t make allowance conditional on anything. Discipline and money are separate issues in our house. Allowance is solely for the purpose of learning to manage money. I don’t want to give them money related “issues” (like spending to spite me) when they’re older and this way they can make money mistakes under our watchful eye with a few dollars of allowance instead of with thousands of salary dollars when they are older. At least that’s the plan - maybe I am an optimist ;-)
    When we discipline, the punishment matches the crime. For example, when my son wrote on the walls with a marker, he had to make it right by helping to wash the walls and he lost his marker priveleges for a few days. CC has inspired me. I will blog about how we teach money management in our house on Friday

  • 18 Canadian Capitalist // Nov 28, 2008 at 2:28 am

    Novice, Money Minder, 4 piggies: Perhaps, cutting allowance is too harsh and could give the wrong signals. We don’t yet give an allowance, so I have a couple of years to think about this!

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