"Goals are dreams with deadlines" -- Diana Scharf

Monday, April 1, 2013

Everything I Know About Money I Learned in the Second Grade

When I was younger, I loved tagging along with my parents when they went to Costco.  Somehow, the shopping excursion always felt like an “event.”  In no other place would I be given so many free samples of delicious, sodium-laden, heavily-processed foods.   Costco first introduced me to jalapeno poppers, pizza bagels, mozzarella sticks, and other forms of addictive cheesy goodness.      

Costco also introduced me to my own avid consumerism.  In no other place was there such an abundance of new, shiny, exciting stuff.   Big or small, I wanted it all.  I can remember many conversations that went something like this:

Me: Wouldn’t it be fun to have a tire swing? Can we buy it?

My Dad: We don’t have any trees in our yard.  Where would we hang a tire swing?

Me: Maybe from the ceiling?  In the family room?

My Dad: That wouldn’t work.   And I don’t think you mom would like it.

My Mom: No, I wouldn’t like it. 

Me: Why not?  It would be fun.

My Dad: It wouldn’t be safe.  And we don’t need it.  If you want to swing, we’ll take you and your brothers to the park.

Me: Okay.  Can we buy a tent?  Wouldn’t it be fun to go camping at the park?

My Dad: Camping isn’t allowed at that park.

My Mom: I don’t like bugs.

Me: Oh.  What about a trampoline?

And so it continued.  Me, begging with my parents for one unnecessary item after another and formulating hare-brained justifications for these purchases.   My parents, countering my pleas with common sense and responsible answers that usually involved the word, “No.”  In hindsight, I realize that I must have been quite a handful as a child. 

Soon thereafter, my parents implemented a rule: if I wanted to buy something, it had to be with my own money.  My “own” money was earned by doing chores around the house and given as an allowance.  If I didn’t do the chores (which was not an option), I didn’t get my allowance.  It amounted to $2/week at age seven.  By the time I was 12, my allowance had increased to $5/week.   Many of my peers were given a weekly allowance equal to their age.  I’m uncertain why my parents settled on the lower amount.  Perhaps money was tight in our household, although it didn't often feel that way.  Or perhaps my parents just thought the lower amount was sufficient.  In either case, having such a modest allowance taught me the value of a dollar.  This was especially important since I was showing signs of an acquisitive personality at a young age. 

By giving me a $2/week allowance, my parents forced me to do three things: budget, save, and prioritize.  Even in the early 1990s, you couldn’t buy much with $2.  Therefore I had to decide how I wanted to spend my money, and then save until I had enough stashed in my piggy bank (I think it was actually a Hello Kitty bank, but you get the idea).   I quickly learned that I couldn’t have everything my heart desired, so I would have to choose one or two things that I really wanted. 

I also learned the terrible feeling of being in debt.  Generally, my brothers and I were discouraged from spending if we didn’t have any allowance left.  There were a few exceptions, including times when we wanted to do something with friends or attend a birthday party (we paid for gifts out of our allowance).   If I needed, my mom would let us borrow from the “Bank of Mom.”  It was always interest-free (wouldn’t it be nice if real banks were this way?), but she kept a running tally of how much was owed.  That tally hung on the refrigerator, so that I could never forget.  Having the debt so visibly displayed was enough to guilt me into paying back the loan as soon as possible. 

Twenty years later, I still like stuff.  I’d be lying if I denied it.  But I think that, by giving me an allowance, my parents instilled money management skills at a young enough age that I’m now aware of my tendency to spend, and can limit myself before I get out of hand.    

Did you have an allowance as a child?  If you have children of your own (or plan to), will you give them an allowance?


  1. My parents didn't buy me anything when I was a kid and I think that it impacted me in many ways that are still felt in adulthood. Some good, some bad.

    1. It's so interesting to reflect on how childhood experiences impact our adult perspectives.

      I was talking to my mom recently and mentioned a particular money incident that was really life-changing for me. I'll write a separate post on it...but there was one point at which my parents lent me $600 right after college. I felt so much shame at my need to accept their help that I changed my spending habits immediately. It was truly a formative experience for me. But my mom didn't even remember this event!

  2. I think your parents did a really good job of showing you how to earn money. My parents did the same with me, however they slacked off when it came to my youngest brother, who is 10 years younger than me. They were never strict with him and in turn he has a horrible work ethic. He doesn't get that you have to work for things and earn money. And he doesn't understand the importance of saving up for something you want.

    1. Thanks for your comment, Erika! I think my parents did a great job of recognizing how easy it would be for me to head down a bad path in terms of spending. I sometimes resented having such a modest allowance, but it benefitted me in the end (and really, it was my parents' money, so who was I to complain?!)

      It's amazing to me that two siblings can grow up in the same household and still have such different approaches to things like money. My husband and his brother are polar opposites on a lot of things...money, study habits, interests, you name it.

  3. My parents didn't buy me much as a young child either but that's because at a young age I knew we were "poor." They did the best they could though and when I was a teenager they gave me allowance that I had to do chores to earn. Money isn't free and I'm happy they thought me that lesson early on :)

    1. It sounds like our parents had a pretty similar approach to teaching money management. When I would ask for frivolous things, I remember my mom saying, "Everything costs money. If you want it, start saving for it." I really appreciated that they didn't go along with the instant gratification that is so prevalent in today's society. If they given in whenever I asked for something, I would have had a much more difficult time adjusting to adulthood and the responsibilities it brings.