Monday, January 25, 2010

Going 50/50

A couple days ago, The Wall Street Journal had this very interesting article in the regular column about student financial literacy in the personal finance section. It's about dealing with the "I wants" that accompany growing up. The idea is simple. If the youngster claims to want a specific item, particularly a pricey one, offer going half-and-half with them. They can use their allowance, birthday money from relatives, or money from their "jobs" for their portion. The lesson for the children is a good one. I have used this strategy a number of times, and it really does help my children prioritize those wants. It's amazing how something they absolutely "must have" can fade when it involves their own funds. And when they do purchase something that way, they frequently take better care of the item than they do with other things they received as gifts.

It actually reminds me of an old "Curtis" comic strip. In it, Curtis asks his mother if he can go see a film ("Gut-Eaters from Mars" comes to mind, but the title is not material). His mother suggests he use his allowance. His response? "But that's my money." Anyone else care to share their experiences?


Anonymous said...

I not only did this with items to purchase but when my son got to high school he paid $50 one month for a mutual fund and I paid $50 the next month. In this way he saved $600 a year rather than $300 and learned to set aside money each time he got money for long term investment. We have also formed a financial club at school and are asking parents to make this same commitment with their child.

Tim Schilling said...

That is an excellent extension of the idea. I hope others take note.