Savings Accounts for Kids

I'm still keeping my eye on ING, but I was excited to find out this week they have kid-friendly savings accounts.

• no minimums
• no fees
• the same 1% annual yield my other accounts get

Check it out here.

My 9 yr. old has been wanting an "account." I'm so happy to find a fee-friendly option for her. I remember my mom taking me to the bank --- probably younger than 9 --- to open my own passbook savings. Does anyone else remember those little ledgers in a folder that looked like a passport??? Gosh, I'm old.

Financial Lessons for the 8 yr. old

As you may know, I have fairly young children. I also am quite determined that my parenting duties include raising kids with financial awareness. It distresses me every day that my in-laws, (who were financially successful) obviously never imparted their financial savvy onto their children. I pray that I can do a better job of raising kids who can go out into the world and not come running back to mom & dad even into their 50's to bail them out of the latest financial mess. My mother-in-law must have known this; otherwise why would she have named me (a daughter-in-law) as executor of her will and trustee of the remaining assets.

Even though my children are only 8 and 4, I am trying. We do chore charts every week, and they are paid weekly based on what they have accomplished during the week. (Don't work = don't get paid!). We have complaints, we have whining, we have moaning....but they are always motivated when they get that cash every Sunday.

At the risk of running into flaming here, I do have what could be considered an extravagant ongoing expense for my 8 yr. old daughter. She loves to dance, and this week is tryouts for what will be her third year on a competitive dance company with the studio. No lies...it is expensive. There are more intense (and therefore more expensive studios) in the area, so comparatively it is a good option. But it is, nonetheless, a sacrifice I make.

(not my daughter)

After realizing that I could hire a twice-a-month housekeeper for what I pay to the studio (and the dancewear store), we had negotiations. She has agreed to be my right-hand cleaning helper each week in return for "being on team". It is a good indication how much passion she has for dancing since she kind of has a lazy streak....which is another thing I need to work on as her parent. It also helps me....and will ensure that I also don't raise a kid who doesn't have any idea how to clean a toilet or start the washing machine. We're 2 weeks out from the negotiations, and so far, so good.

On Saturday, we had another "lesson." I had purchased an accessory at the dancewear store that she decided she did not want. When I was leaving to run errands and return it, she asked if I would buy a pair of jazz shoes instead. The jazz shoes cost approximately $20 more than the item I was returning, and I just happened to know that she had $20 left from the vacation money she had raided her piggy bank for. At first, she balked about kicking in the $20 from her own money. I told her to think about it....the store is only a mile from home and we could always stop in and buy them if she wanted. About 30 minutes before the store closed, she asked to go buy them. She even said, "I can make back that $20 in about 3 weeks."

I am so glad she took her time making the financial decision, weighed the costs, and came to the realization of just how much work (3 weeks worth) it will take to replace this money. Could some of my lectures have sunk in? Based on what happened Saturday, I believe the lessons are working!

Sharing a Funny

In the past couple of months, I've let my eight-year old know that she has an account set aside for college. We've never been able to fully fund her Education Savings Account, but we have contributed some money to it every year since her birth (as well as to an account for her little brother). This past Christmas, she caught onto the fact that her grandfather was giving her money for Christmas but she wasn't allowed to have it since it was going to be saved for college. That's when I explained the account to her, gave her a micro-introduction to mutual funds, and showed her the account statement for her fund.

Yesterday she told me that one of her classmates was moving to Boston next month. They've been classmates for both first grade and so far through their second grade year. I found out that Charlie's dad got a new job, but that Charlie hadn't been to visit Boston yet. Then she said she told Charlie that her college money was in Boston. Since that's not a fact I would recall, I thought it was funny what she remembered from our discussion and her "review" of the account statement.

Chore Charts: Re-entry to Reality

Yes! We are back from our week at Disney World. It really was so nice to leave all business and domestic responsibilities on the jet bridge at the airport and spend the week focusing on having fun and enjoying all there is to see and do at Disney! I really didn't even worry about budgets or bills since almost everything was paid for ahead of time, and the money we needed for everything else was either in our pockets or sitting in savings awaiting the credit card bill.

But it's back to the real world. Not so hard for me today--the years have taught me that the more I get done on Sunday leads to a better, more peaceful work week. And yes, I just folded the 7th load of laundry. UGH!

But reality has been harder for my kids. First, they were(still are) ultra exhausted. Park hopping, pin trading, and character meeting for 5 straight days wears their little bodies out. Add on the fact that both had been out of their regular routines for two weeks prior due to school holiday closings, one of those weeks with grandparents visiting to dote on their every whim 24/7. And no sooner had the Santa deliveries gotten the slightest bit boring they are whisked off to Florida for a week of Mickey, Minnie, et al. Vacations and holidays are wonderful, but overall I've found my kids really do better with more structure and responsibility....then again, don't we all?

So today...I resurrected the Chore Charts.



We used these last year, but had slackened up the past couple of months. It really does take ALOT of my time to make sure they are staying on task, but I know it's important for development of their work ethic, esteem as a integral part of the family, and for financial lessons.

I follow the Dave Ramsey principle that kids earn commission not allowances. Work, get paid. Don't work, don't get paid! I also subscribe to the general rule that allowance should be $1 for each year of age. My 4 yr. old son has the opportunity to earn $4.15 per week (9 daily chores at 5¢ each for 7 days PLUS 4 weekly chores at 25¢ each). My 8 yr. old daughter can earn $8.00 per week (10 daily chores at 10¢ each PLUS 4 weekly chores at 25¢ each) although I probably should add another weekly chore since she recently exhibited the ability to push the Dyson around. :)

As you can see, the little guy is my worker. My overtired drama queen almost needed a cattle prod to finish up her homework today. Notwithstanding all that wasted time complaining and crying about homework, a mom-induced 2-hour nap this afternoon left her with not much time to do the rest of her chores this evening.

Oh well! She may or may not learn her lesson when she wants money for something I'm not willing to pay for and it isn't there in her piggy bank.

How do you handle chores and allowances for young children?