Editor's note: In an occasional series of columns, Dr. T is chronicling the experience of the Durney family of Adelphi, Md., and the allowance system they have set up for their two oldest children, Lucas, 13, and Kendra, 10.
Parents Peggy and Chris Durney are giving their children a monthly allowance ($50 for Lucas, $40 for Kendra) to be budgeted among six categories: spending (50 percent); long-term savings (15 percent); short-term savings (10 percent); gifts (10 percent); and charity (5 percent).Overall the Durneys are pleased with the system, but they have run into problems they didn't anticipate.
Dear Dr. Tightwad: What should we do about our other children who aren't old enough to be on this system? Caitlin, 7, and Tessa, 5, see Lucas and Kendra with money to spend and want some of their own.
We have decided age 8 is a good time to start on this system, but we are left with unhappy little people.
When Caitlin and Tessa think about it and ask for money, we give them $2 and $1.50 each for spending money for a week. When they don't think to ask, we don't think to give.
I feel we have to revisit this issue.
Answer - Don't spend too much time puzzling over it because you've already found the answer.
The amount you're giving your younger children is fine. But you should be giving it to them on a weekly basis like a regular allowance, which they're old enough to be getting.
Don't try to divvy up the money into categories. If the children tend to be big spenders, you might want them to save, say, 10 percent of their money. For younger children you don't need to get any more complicated than that.
Dear Dr. Tightwad - When I'm at the store with my kids they often see something they want but they haven't brought any money with them. They ask me to buy it and promise to pay me back later.
Most of the time I don't mind because I know they have money at home, but I wonder if I'm being too easy on them.
Answer - Dr. T's rule: No pay-you-backs. Your kids should be learning how to plan ahead and bring along their own money. Instead, they're learning they can always hit up Mom or Dad for a short-term loan.
And Dr. T will wager that they're counting on you not remembering to collect when you get back home. Don't let yourself get rolled by your own kids.