Monday Q&A | Kids & Money + Children's Birthday Parties
Every Monday, I answer a few of the questions that my readers send me. If you have a question you'd like me to answer in a future Q&A post, just leave me a comment here or email me (thefrugalgirl [at] gmail [dot] com) and put Q&A in the subject line. I look forward to hearing from you!
Your entry on your family size and being green got me thinking about the topic of kids and money, and I would love to hear how you're raising your children to be responsible with finances. What do you do about allowances? Do they get an allowance? How old were they when they started, how much do they get, and do they have to earn them? tithe on them? save from them?
-Sally
Our kids do get an allowance (we started this around the age of 3), and at this point, it's not tied to a specific job or chore (though they certainly do chores and jobs around here!). We do sometimes pay them to do jobs that are over and above their normal assigned chores.
Our kids all have banks with three sections in them...one is a church, one is a store, and one is a bank. When they get their allowance, it gets divided up between these categories. 10% goes into the church, 40% goes into the bank, and 50% goes into the store. We take the church money with us on Sundays, of course, and the money in the bank section is for very long-term savings, like for a car or for college.
The store money is theirs to do with as they please, and it's very interesting to watch how differently they each handle their store money. Joshua is a natural-born spender, so his store money section is usually empty or nearly empty. Lisey, on the other hand, is a born saver, and so though she has no more income-earning opportunities than Joshua, she's usually got a nice pile of cash going in her store. Sonia is somewhere in between, and when she's low on money, it's usually because she's spent it buying things for someone else. Zoe doesn't really do much shopping yet, so it's hard to tell what her money personality is.
This simple system we use with our kids teaches them some very valuable lessons. They're learning:
- to give away some of their money
- to save for future expenses
- that they can't buy everything they want. When they're out of spending money, they're out of spending money, as we operate on a cash-only basis around here (no loans from Mommy and Daddy!). This has been a little bit painful for them on a few occasions, but we hope that these experiences will stick with them and will keep them from poor financial habits later on.
We've been grateful to already see that some of these basic financial concepts are sinking in, even with the spendiest of our children!
My daughter will be 2 in June and I want to have a frugal birthday but still invite a lot of family and have tons of fun. Do you have any suggestions on how to do it? Since she is so little, should I just keep invitees to a minimum? This year, I only invited very close family and friends because I thought she could get overwhelmed if I had a lot of people and I still managed to spend quite a bit.
-Liza
First off, I should say that I don't think that there is a right way and a wrong way to do children's birthday parties, and what works for one family may not work for another. That said, we have chosen to keep things simple and low-key for our children's birthdays. I find that enormous gatherings are a lot of stress, a lot of expense, and are not that much fun for small children.
Zoe just turned 4, and for her birthday, we just had a small birthday dinner with the six of us. We made a birthday cake for her, gave her presents, and after the birthday dinner, we all went out to the pet store and bought her two goldfish (that was one of her presents). We all had a fun time together, and I did have to lose my mind planning a huge party.
Our older children usually invite one friend over for their birthdays, and they often have a sleepover with that friend. It might seem sort of boring to have one friend instead of a houseful of friends, but my kids enjoy having the one-on-one time time with a friend without being distracted by the presence of many friends. Also, because only one person is being added to our household, I'm able to do more fun activities for the birthday celebration. It's easy to take the kids swimming, or to do a craft or baking project (I'd be loathe to attempt that sort of thing with a bunch of guests).
If you do decide to invite a number of people over, I'd suggest trying to keep things simple in order to cut down on the cost. Have a kid-friendly menu (at our house, the birthday person picks the menu, even if it's an odd menu choice!) and don't worry about trying to impress the adults with the party fare (since her party is in June, maybe you could have a hot dog and hamburger cookout). Don't feel like you need to purchase piles of birthday decorations, or do elaborate party favor bags (I don't usually do traditional party favor bags...we usually make or bake something together, and the finished product is the party favor).
Probably my best advice is to keep in mind that it doesn't take a lot to make a two-year-old happy. And along with that, remember that a stressed and financially strapped Mommy is no fun for a two-year-old!
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Readers, as always, feel free to chime in if you've got some advice to add to mine.
I love your idea for having your kids put away certain percentages of their allowance towards charity, savings, and spending. We're not religious, but I think once our kids are old enough for allowances, we'll have them put a certain percentage away to a cause of their choice (animal shelters, etc). I always tried to save as a kid, but didn't quite have the discipline--I think it would be a lot easier with your parents helping!
How do you decide how much allowance to give each child?
I love that method of dividing up allowance! We did the exact same thing growing up, and it was great. When we got older and we got jobs, my parents didn't have to tells us to be wise withour paychecks- cause it just seemed to make perfect sense to tithe, then save a little, and then have some to spend.
Kristen, I just watched your segment on the 700 Club! Great job!!! 🙂
Another two cents about birthday parties:
I've helped out at a bunch of parties for kids 5 and under. My observation is that expensive parties are either to save the parents from having to plan one themselves (ie, doing it at the zoo, or nature reserve, or Gymboree) or to impress other parents. The kids themselves seem awfully happy to play with each other and someone else's toys.
For example, for my nibling's (a summer child) 3rd birthday the parents set up the backyard with their existing outdoor fun (wading pool with bath toys, teepee, slide, a water table). Instead of a cake we had decorate-your-own cupcakes. Snacks were same for kids and adults: cheese, cold cuts, crackers, veggies, dip, juice boxes, pretzels, and such like. The decorating mess was incredible - did you know that three year olds have no sense of "enough"? - and we left all of it outside for the critters.
The nibling's parents also specified "no gifts" but not everyone complied. There was no gift unwrapping at the party. There were no unaccompanied children - everyone had at least one parent there. I understand these are all norms at this school, I don't know when it changes to a drop-off party with gifts.
where did you get these banks! I must have them for my children. Love it.
Just wanted to let you know that we handle children and money in the same method that you do. My children are now teenagers 18, 15, and 12. They all have become very responsible with their money decisions. We started at about 3 years old also. They receive a small weekly allowance that gets raise in increments depending on age. They purchase all their own entertainment, have a clothing allowance that they can supplement and purchase all of the gifts that they give.
This method really works.
Meg. I found the bank at CBD. Thanks Kristen for this tip.
http://www.christianbook.com/my-giving-bank/9789834502706/pd/502702
We also started giving our children allowance when they were three years old, and we had them divide it the same way you do. We started at 10 cents per year per week (so our four-year-old got 40 cents), because that's what we got as kids. Then we realized that that really wasn't enough, and besides I'd forget to give it to them on a weekly basis. So, we moved to $1 per year per month ($4 for the four-year-old). Since we felt the purpose of an allowance was to teach them wise money management, we didn't tie it to chores. (You did chores because you were a member of the family; you got an allowance because you were a member of the family.) However, we also wanted them to learn how to "earn" money, so allowances stopped when they turned 12. At that age they were able to find lawn mowing or babysitting jobs from the neighbors. And that worked for us. I hope it helps someone else.
As far as birthday parties with friends, we always did home-made ones at home (or maybe a nearby park), and the birthday child was in charge of all planning - invitations, what to eat, what to do, etc. That way they got exactly what they wanted. We didn't do parties until they were old enough to plan them. And family birthday parties were very simple - their favorite dinner followed by cake and ice cream and presents.
With 6 children Birthdays seem to always be right around the corner. We are not into making a big fuss either. I let the birthday kid pick the cake/dessert they want me to bake. Anything they want...I will find a recipe somewhere for it. They also get to choose what is for dinner. Then we just blow up a few balloons and do presents and cake. It always delights me on how excited the kids get when they have all the power in deciding what is for dinner. I love that they sometimes think out of the box for the"cake" and pick cinnamon rolls or pie. It makes it fun for me too since I love trying new recipes. Keeping it simple leaves so much more time for fun!
My brother, sister, and I had those banks when we were little. They didn't have those cool colors then though.... mine is clear (and, yes, I do still have it 🙂 )
Thanks a bunch for answering my question about the birthday party! I really appreciate it. The hot dogs and burgers idea sounds great, not a lot of fuss and simplicity is what I want.
I have 5 (soon to be 6!) small kids in my extended family so I have been to a multitude of child parties in the last few years. The oldest is 8, so he has a "real" party with lots of friends, cake, presents, and is usually at a playground, gym, someplace where kids can run around. The youngest in the family will be 2 in April and I imagine his birthday will be much like his first one. At home, with family and few close friends of the family. This party was very relaxing and the kids did their own thing and the adults did theirs. In the middle of this pack are two four-year-olds and a 3-year-old. All have had parties at home and parties at one of those gymboree-type places. The parties not a home seemed stressful for the parents and child. The child was overwhelmed, confused at the large number of strangers (kids of friends of the parents), and ended up crying more than one time. Not even getting into money matters, it seems easier to have a party at home until the child is old enough (4 or 5 maybe?) to make a decision about where they want to have a party. Less stress for the parents, less stress for the child.
I like themed birthday parties. My daughter turned 3 a couple of weeks ago and we did a Cat in the Hat birthday party. I made a Cat In the Hat cake (http://www.flickr.com/photos/bfhoyt/4376962091/) - the pattern I simply traced by enlarging a picture on my pc monitor and putting baking paper over it; I got a couple of Cat in the Hat costumes and a puzzle from the Toy Library at a total cost of $2.50 and had pretty simple snacks that were mostly red/white. Cheap things like cupcakes with red icing, home-made popcorn, cheese and cherry tomato sticks and of course green eggs! (http://www.flickr.com/photos/bfhoyt/4376961517/). For games we played 'Follow the Cat' (as in follow the leader), I drew cat faces on the kids with a face crayon, blew bubbles outside and just let the kids (9 in total) run around outside. The kids all came with a parent and I made sure to specify on the invite when the party finished, so the guests knew not to hang around all afternoon!
I think it went pretty well and it wasn't too stressful. 🙂
Nice cake!
For my kids' birthdays, I always cook whatever they want for dinner, and I let them pick out a cake from one of my cookbooks. I also let them pick something fun to do, like going to the zoo (we have a year pass!), or to a $1.99 movie. My daughter Alia turned 4 in January. She wanted chocolate chip waffles, scrambled eggs, and hot chocolate for dinner, and a chocolate cherry trifle for her cake. I made the waffles with whole wheat flour, at least.:P
Some excellent tips on allowance in the post as well as in the reader comments. In particular, I was surprised to see how young some are starting (3) since I usually hear around 5 or 6 (but not a bad thing IMHO). I like the commentary on the diverse "money personalities" - we've seen similar diversity in our 5 kids, and I think that's just fine as long as things don't get too extreme in any particular direction. Balance is key, and the splitting approach tends to help make that a reality. As the kids grow older, it gets hard to scale the physical piggy bank approach, and you tend to want to teach more sophisticated banking lessons too. Since I did not want to jump to real banks with my kids for a variety of reasons, I went with a "virtual family bank" approach. If interested, you can see a tour here: http://bit.ly/aijBY7
Years ago, when my children were little, I invested in a few Wilton cake pans, one being Sesame Street's cookie monster, which is a relatively small pan. Even if you're not a cake decorater, the star tip is very easy to use, and decorating your own cakes is much cheaper than buying from the bakery. My son and his wife used the pan and made the cake (and used the remaining batter for cupcakes) and also bakes several dozen cookies to surround Cookie Monster. Many compliments and others imitated for their children's parties. Dollar Tree is an excellent store for decorations and party favors.
2 cents about kids' parties:
My parents always had 1 rule for our parties: No more guests than the number of years old you were turning.
The most memorable parties at our house over the years:
My sister's "garden" party: Mom made a cake with crumbled cookies and gummy worms on top, and decorated the porch with some simple flower motifs and things from our garden (my sister is blessed with a spring birthday)
My Holiday Inn party as a young teen: Mom rented a room at the local Holiday Inn for one night, and I was allowed to invite 3 friends (the room held 5 people, and Mom was staying the night). We swam in the pool, ordered a pizza, and Mom had picked up a cake - it was so much fun, a real treat, and probably cost about $100 total for the room, the pizza, and the cake.
My brother's pizza party: As a middle school kid, he invited a bunch of friends (all guys of course) over to our house. Our family has been making pizza from scratch for as long as I can remember, but out of all 8 or so of his friends, only 1 had ever cooked! They all had an absolute blast making their own pizzas (Mom made dough from scratch, and Joseph directed his buddies on how to assemble), and some of the guys still talk about that party in fond terms today.
We painted T-shirts one year for one daughter's party. We already had the paint and a 3 pack of men's white T-shirts was less than $10. I have 2 daughters with fall birthdays. One year we had a bon fire and weenie roast with s'mores for the eldest. She eventually out grew the party just in time for it to be adopted by her younger sister. They never want to come inside, staying out to play hide and seek in the dark. (we live out in a rural area, not a neighborhood.)
Hi! I just saw the CBN footage on you and I love it. You have really inspired me. Ever since I first came across your blog in my quest to reduce waste, make yogurt, bread, and live on less, I felt like you were talking directly to me and the needs of our family. I also have four kids and we also teach our kids about money and have three different accounts just as you do. Are you LDS? We are. We give 10% of our earnings to our church. The Lord blesses us immensely and we try to do our part by giving back to Him . I love your blog. I have told my friends at church and at my kids school about it. Thank you for your constant quest at frugality. If you get a chance between your thousands of emails, check out my Adventures in Homemaking blog. Thanks again! By the way, the yogurt has been turning out awesome!
Hi Sweetheart,
I am so proud of you. Love your frugal girl ideas. We are very frugal at our house. We have a garden, can our food, we have chickens (48) for eggs and meat. We operate on a cash only basis, no credit cards, no debt other than our house payment.
We both drive older vehicles but they are paid for. With economy being what it is today, we believe this is the safest way to go. We also can meat, chicken, beef and pork. I have tons of saving tips if you are interested. We are currently both working, thank the Lord. I am a clerk for the County Judge and Harold works for the County Road Dept. I kid him about playing in the dirt with the "big boy toys".
Would love to hear from you and share ideas. Love you, Clarice
Hi all,
I am new to this blog! Thank you Kristen for taking time out of your busy schedule to share great ideas! I am loving it! I love making birthday parties for my children really special without spending a lot and a friend of mine shared with me how she made a birthday cake for her daughters birthday. It was a cake made to look like the gown of a barbie doll. The directions for this are found at howdini.com. They have tons of other ideas for cakes and much more. I made this cake for my daughters 6th birthday and she really enjoyed it. I saved a lot of money and it was fun being creative and trying something new! I hope this is helpful. Have fun celebrating!
Beautiful!
I am trying to establish similar values in my 6 year old daughter.
Non Consumer Girl
This bank is adorable and so clearly laid out.
I'm never sure how much allowance is reasonable. We haven't started allowances with our kids yet...
I did loan my daughter (who was 6) money and carefully kept track so she could pay it back (which she did with a few reminders that in life you pay your debts off first). It's the opposite approach from you since I felt loaning money and having her pay it back would help to keep her from poor financial choices later on. It seems to have worked (so far lol...). In the past year she hasn't asked to borrow money from me again. I think she likes the idea of saving and having the money instead of having the debt.