‘œIn teaching you cannot see the fruit of a day’s work.   It is invisible and remains so, maybe for 20 years.’ ‘“ Jacques Barzun

Our 13-year-old daughter is in the middle of her own financial implosion.   On the last day of June, after spending several days with a friend, she stepped into my office and remarked, ‘œGee, I am going to need to save some money!’

I played stupid, even though I knew what was up.   Since the beginning of the year, our daughter has been regularly raiding her savings account.   Over the past six months, she has reduced it from a high of $275 to a mere five bucks.   Since our credit union requires a minimum balance of $5, she’s effectively brought her savings down to zero.

I tried to keep things casual.   ‘œOh?’ I replied.

‘œI went to the bank when I was staying with my friend, and I didn’t have any money!’

Again, I tried to remain nonchalant.   I gently agreed that she should start saving, and then deliberately said nothing more.   Although on the surface I tried to do my best to remain calm, inside I was practically cheering.   I want my daughter to learn from her own financial mistakes, and this is a great learning opportunity for her.   No doubt she’ll feel some considerable pain at not having funds available to fritter away on whatever she wants, but I’m thrilled that she might learn the lesson of being flat broke now, while the financial stakes are low.

In my opinion, the lesson of budgeting can’t come too young.   I’d much rather her learn the sting of (relative) poverty now, while she’s living at home and protected, than to learn the lesson as an adult when blowing all her cash could ruin her credit, or result in a repossession or eviction.

For the past couple of years, we’ve paid our daughter a small allowance.   For the first year or so, we paid it weekly.   Later, we switched the payment schedule to monthly, in the hopes that she’d learn better budgeting and money management skills.   Since she turned 13, we’ve paid her $20 per month, and we haven’t put any restrictions on her spending.   She’s allowed to spend, save, or donate it to charity as she wishes.

Like Holly, I don’t think our allowance system is entirely working.   Our daughter hasn’t learned to budget, because an influx of birthday and holiday gifts near the end of last year gave her quite a bit of money to blow.   She also has relatively simple wants and desires, so she’s bought very little in the way of tangible goods.   Most of her money was spent during the school year at the corner market on lunches and snacks because she solidly refused to pack a free lunch from home.

Now that our daughter’s savings account has reached zero, she’s going to learn a hard lesson about money: it’s much easier to spend it than it is to earn it.   She will be faced with making some painful choices.   When school resumes, will she want to spend her allowance on lunch, or would she rather save it so she can go to the movies or the municipal pool with a friend?   My wife and I are in agreement that we are going to be completely hard-nosed when it comes to pleas for more cash.   Although we cover all our daughter’s basic needs, such as food, clothing, and family outings, anything beyond that is her responsibility.   No doubt in the coming weeks she’ll find that she’s out of money before the end of the month, and perhaps it will cause her to re-prioritize her spending.

Next in series: Taking the Show on the Road

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