[Tricia Meyer]

When my husband was growing up, his parents always took half of any money that he received as gifts (and later through chores and jobs) and deposited it in a savings account. The other half he was free to spend however he pleased. His parents paid for most "extras" associated with school and entertainment. Over the course of the years, he ended up with enough money in his savings account to buy a car. In my family, I kept all of the money that I received but I had to spend it if I wanted anything extra like a t-shirt for a club, tickets to the high school football game, etc.

Now we are faced with the decision of how to deal with the money that our own kids receive. I can see the pros and cons of both approaches. What do you think? Have you done something similar as either? If so, how does it work for you?

[Tiera]

Tricia Meyer, on 03 November 2010 - 10:47 AM, said:

When my husband was growing up, his parents always took half of any money that he received as gifts (and later through chores and jobs) and deposited it in a savings account. The other half he was free to spend however he pleased. His parents paid for most "extras" associated with school and entertainment. Over the course of the years, he ended up with enough money in his savings account to buy a car. In my family, I kept all of the money that I received but I had to spend it if I wanted anything extra like a t-shirt for a club, tickets to the high school football game, etc.

Now we are faced with the decision of how to deal with the money that our own kids receive. I can see the pros and cons of both approaches. What do you think? Have you done something similar as either? If so, how does it work for you?

☺ I always saved half like your husband. We have 6 kiddos, so they don't receive money too often. We usually have a special thing on our want list. So we ask the Kiddos if they would like to add their "tooth fairy" money to their Piggy Bank. This year the "Want" is Plane Tickets for their Grandpa to come visit! They really want this. They even ask me to pick up any coins they might see in the parking lots. I proudly do and every single penny they have is in that chubby piggy bank! We also have bank accounts for each that Mom & Dad add to when we have it. (Sorry to ramble) ~Tiera ☺

[Katy]

Right now my two kiddos are only 1 and 3 years old so this isn't something I've really had to deal with. Everytime the kids get money it goes right into their piggy banks and then about every six months we empty the banks and put the money into their savings accounts. I can honestly say that I have no idea how I am going to deal with this later. In my opinion it kind of depends on your financial situation, I mean if you guys can afford to pay for all of the "extras" then I kind of like the idea of making them save half. Another approach could be to have them put half directly into the bank and then let them hold onto the other half to pay for extras...? I hope this has been helpful.

[formygirls]

My kids are 14 & 16 now, but when they received money from out of town family and were too little to know better it went into the savings. Once they were old enough to understand, I took 1/3 and put it in the account and the rest they could divide into their allowance envelopes.

Let me explain how I do allowance, I saw a lady on Oprah when my oldest was 6 and am so happy. Her idea was a kid can't manage money if they don't have any, so $1 a week is not going to work. My kids get $1.00 per week for their age, so the 14 year old gets $14.00 etc... Now they don't get to spend it all. Now the envelopes, and you can make them anything you want. Each girls envelopes at this age are different when they were younger I made up the envelopes. Currently they include: Charity, College, Spending Money, Vacation money - for a trip we are planning), Car. The girls must put $1.00 in charity and $2.00 in college and can then divide up the rest. I have been doing this since my oldest was 6, and I was able to avoid the tantrums in the stores I see other parents deal with. Because when my girls asked for something I never said No, I said, as soon as you save up enough money we will come back and get it. 9 times out of 10 we never went back. Now my girls don't ask me for anything, they know it is up to them.

Tip: When its time to apply for college you don't want any money in the child's name, it will count against them in the world of financial aid - so no uniform gifts to minor accounts that lock it in until they are 18, you have to fill out financial paperwork for college before they turn 18.

[Tricia Meyer]

Thanks for all of the great tips. You are really giving me some ideas to think through!

[Rylee Ava Baleigh MOMMY]

Tricia Meyer, on 03 November 2010 - 10:47 AM, said:

When my husband was growing up, his parents always took half of any money that he received as gifts (and later through chores and jobs) and deposited it in a savings account. The other half he was free to spend however he pleased. His parents paid for most "extras" associated with school and entertainment. Over the course of the years, he ended up with enough money in his savings account to buy a car. In my family, I kept all of the money that I received but I had to spend it if I wanted anything extra like a t-shirt for a club, tickets to the high school football game, etc.

Now we are faced with the decision of how to deal with the money that our own kids receive. I can see the pros and cons of both approaches. What do you think? Have you done something similar as either? If so, how does it work for you?

I think that you should go with your husbands way because it is a tough economy out there and if your child has some money saved up when he is off to college that would help him tremendously and also tell him of what you are planning on doing with the money and he may want to contribute some of his own spend money into the savings account.

[smartstep]

We let our son decide what he wants to do with gift money. However, we do stop and talk about what he is saving for, how much he needs, and would it be good to keep some. But ultimately after we discuss what is going on we let him make the decision. It not only helps him learn how to manage his money, but also make decisions.

I did actually write an article on this back in December, if you want to check it out: http://www.takeasmar...ids-gift-money/


Good luck!
Andrea

[mom2girls]

smartstep, on 25 January 2011 - 01:41 PM, said:

We let our son decide what he wants to do with gift money. However, we do stop and talk about what he is saving for, how much he needs, and would it be good to keep some. But ultimately after we discuss what is going on we let him make the decision. It not only helps him learn how to manage his money, but also make decisions.

This is what we do with the girls and most of the time they will put some in their savings.