Kids Allowance: Cash v Debit Cards \ stacker news ~Personal

2478 sats \ 13 comments \ @hodlpleb 22 Feb Personal_Finance

A family we know has given their kids (8 & 12 y/o) debit cards, which are funded automatically, for their allowance.

I don't know all the details of their system of if the kids get any other money (We have Give, Save, & Spend jars, and Stats to their Lightning Wallets)

I'm trying to figure out if debit cards makes sense from a financial education standpoint, or is this family just doing it for the sake of convenience (don't gave to get cash from the bank, don't have distribute the cash by hand, don't risk losing the cash... )

I am all for automated systems, but I think automating this would eliminate the focused "allowance meetings", where we have a lot of great conversations about money.

I am interested to hear your opinions here.

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496 sats \ 0 replies \ @endothermicdev 22 Feb

There are a few chores my son is expected to do every week regardless, but others (like mowing the lawn) that are his option and that are paid. I like to make sure he has an opportunity to earn money and not be reliant on us if he wants to buy something.

I give him the option to be paid in cash or sats (he has a lightning wallet.) He usually prefers the latter so he can spend it online.

343 sats \ 6 replies \ @go 22 Feb

My success:

No allowance. Chores expected.

Seasonal outside work also expected. If you help out around the house, then you are free to do work for neighbors (who usually pay more than I ever would!)

The wins:

They don't see me as a piggy bank
They start seeing opportunities for money
They end up having great work ethic and listen to instructions from others well.

What we avoided:

The constant gray area of whether you pay the allowance in full because they didn't do some of their chores, or you get the promise to finish the chores another day, or just pestering for them to do their chores "or else" they won't get paid. Bleh. Count me out.
Any sense of entitlement. My kids genuinely think we're poor because we live by a budget and don't throw money around at things we feel like.

71 sats \ 2 replies \ @hodlpleb OP 22 Feb

I agree that allowance should not be tied to chores l, but without allowance are you teaching any financial literacy? If you’re relying on them to earn money on their own, their financial education depends on them being driven to earn money.

0 sats \ 1 reply \ @go 22 Feb

I wouldn't throw my advice around on much, but this has been such a big success in our family that I'm putting it out there. Let's just say, as an analogy, that the first year of homeschooling isn't quite the dreamy big win you want it to be either. Shaping expectations and motivations take time

71 sats \ 0 replies \ @hodlpleb OP 22 Feb

I think I get the homeschooling analogy, but not sure.

I never got allowance (and my parents were terrible with money). Eventually I got a job because I needed some spending money - but didn't develop any good money habits until I was ... in my 30s? I had nobody guiding me and every dollar I made burned a hole in my pocket. I actually racked up a lot of credit card debt when I was 18, because I did not understand anything about savings or the implications of debt.

I look at allowance as a tool for learning about money and to develop a healthy relationship to money.

10 sats \ 1 reply \ @SpaceHodler 22 Feb

My kids genuinely think we're poor because we live by a budget and don't throw money around at things we feel like.

I like that! Reminds me of that meme where the poor guy wears the most expensive clothes. I can definitely relate through some people I know.

31 sats \ 0 replies \ @go 22 Feb

We have a mantra that the kids roll their eyes and repeat on demand: “What the difference between a rich man and a poor man?” “A poor man has spent all his money”

0 sats \ 0 replies \ @KLT 22 Feb

This is great, thank you for this advice. My kid is only 4 but I’ve been curious as to an ideal way parents handle this.

73 sats \ 0 replies \ @kristapsk 22 Feb

We give our daugther fixed amount of fiat money per week. In cash. + sometimes some extras for something she do extra. From time to time she manages to save some of it and then gives it back to me and asks for BTC instead.

62 sats \ 1 reply \ @gnilma 22 Feb

My 2 older kids are 12 and 11, and they don't get allowance. They get red pockets from family and friends annually from Chinese new year, which is usually a lump sum amount of about $250-$300 total a year. I get them to save at least half of it in sats, and the rest they keep as spending money. But now, they would just convert everything into sats, because I've brainwashed them into believing that the purchasing power of bitcoin goes up over time. They would put the amount they want to save in their on chain wallet (Nunchuk) and the spending amount in their lightning wallet (Phoenix). I'm their source of fiat if they want to buy things with fiat, and I make it a point to always want to get their bitcoin (which I actually do).

I also give them the choice of picking a $100 birthday present on their birthday, and a $100 Christmas present for Christmas, or $100 equivalent in sats for each occasions. They both took the sats for 2022 and 2023; looking back, it seems they both made good choices.

They also have chores that they must do for free, because they are part of the family and must contribute to helping the family. Chores include but not limited to, doing laundry and folding them after, washing dishes, sorting recycling, taking out garbage, raking leaves in autumn, shoveling snow in winter, baby sitting their baby brother (5yr old). I also offer them tasks that I pay for them to do such as washing my cars, resupplying my work supplies, or working for me. Basically anything that I would otherwise need to pay someone else to do or something that I get paid doing, I would pay them if they do these tasks.

Otherwise, they don't have a fiat bank account. I deal with them purely in cash and in sats, although they tend to always want to keep their money in sats and only exchange fiat with me when they need to.

0 sats \ 0 replies \ @KLT 22 Feb

Love all this. Kudos pops!

210 sats \ 0 replies \ @cryotosensei 7 Mar

So, parents of elementary school graders typically give their children smart watches, which they will use to buy food during recess time at the canteen. I don’t think allowing them to go cashless is a good idea because children are visual creatures. They need to handle notes and coins in order to develop a sense and appreciation of money. So, my boy is four years old and I let him spend his Chinese New Year money on the toys he fancies - because it’s only through consumption that he can analyse whether he’s making correct money decisions.

I’m not doing sats at the moment. Cash is still predominantly used in my society and I want him to feel confident about that first

21 sats \ 0 replies \ @brandonsbytes 22 Feb

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