Paper route teaches our kids to manage their money!

In my last post, I talked about how we manage our kids’ allowances. There are quite a few rules attached to our kids’ allowances and paper route money, all meant to teach our kids fiscal restraint, delayed gratification, the value of giving, and the satisfaction from working for something they really desire.

The rules came about from a lot of trial and error, and might have never evolved had it not been for our paper route.

When we started paying allowances to our two older kids, what they received amounted to pocket money. They could afford to buy the odd treat now and then, but that’s about it. They were also younger and had yet to get a taste of consumerism.

That all changed when we got our paper route just over a year ago. The route was my idea, but the kids seemed enthused. Here was a chance to earn some extra money for their education and to get some exercise while they were at it.

And the paper route does pay well. Suddenly, my older two went from receiving about $30 a month to close to $100 each. With no expenses or responsibilities, and relatively inexpensive “toys”, I figured this was akin to me earning $2000 a month of gravy money.

Almost overnight, my kids turned into shopaholics. I was being asked daily to search through Amazon.com for Lego, or harassed to drive to the mall. My daughter showed some restraint; her younger brother was spending his money as fast as it was coming in.

Horrified, my husband and I hashed out a set of rules that they had to live by (as outlined in my last post). This put the brakes on their spending, and with limited access to their money, they had to start really thinking their purchases through.

I also bought four paper ledgers so the kids could track where their money comes and goes. If they make a purchase, I encourage them to write down what they bought and how much it cost (how many times have you looked at your bank balance, wondered where the money had gone, yet seem to have nothing to show for it?).

In just over a year, I’ve seen my kids go from out-of-control spenders to more thoughtful, mature consumers and savers. My oldest is very generous with her earnings, often donating to charitable causes like the SPCA. My son, though still prone to impulsive changes in his savings goals, did manage to pay for half his new bike (although he bought his bike at the end of the summer, having spent his money on Lego).

Our twins are just beginning to find their spending and savings style. When we’re in stores, my youngest son will often want to buy something on the spot, but without cash in hand (one of our rules: there are no IOU’s), he will often forget his impulse. My youngest daughter, not so bent on spending, often surprises herself by how much money she has accumulated in her piggy bank, and will reward herself with a larger purchase.

The other day, my oldest daughter, upon noticing the phone bill on my desk, asked me: “How come we have to pay for the phone?”

I already have the next money lesson in mind.

Kim Dudra is a freelance copywriter based in Vancouver, B.C., and is the owner of  re:fresh communications. She’s been known to juggle four kids’ schedules, three computers, two cats, and one cup of coffee all at once. Kim is a featured writer for girlgetstrong.