Comments on: Book Review: The 4 Little Pigs

By: Canadian Capitalist

Canadian Capitalist — Fri, 28 Nov 2008 06:28:12 +0000

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!

By: Money Minder

Money Minder — Wed, 26 Nov 2008 20:15:04 +0000

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

By: Poedin

Poedin — Wed, 26 Nov 2008 19:12:26 +0000

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.

By: 4 Piggies

4 Piggies — Wed, 26 Nov 2008 18:59:57 +0000

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”.

By: Dividend Growth Investor

Dividend Growth Investor — Wed, 26 Nov 2008 18:16:04 +0000

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..

By: Novice

Novice — Wed, 26 Nov 2008 17:51:27 +0000

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.

By: Canadian Capitalist

Canadian Capitalist — Wed, 26 Nov 2008 16:35:59 +0000

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.

By: Rico

Rico — Wed, 26 Nov 2008 16:33:38 +0000

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.

By: Money Minder

Money Minder — Wed, 26 Nov 2008 16:31:16 +0000

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.

By: Novice

Novice — Wed, 26 Nov 2008 16:14:28 +0000

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.