My nearly eight-year-old boy and I were in the toy store the other day. He decided he didn’t need a toy that day because he’s saving up. You should have seen some of the looks I got from other parents.

He’s got almost $150 saved from his roughly $5 per week in odd jobs money. I’ve encouraged his savings by paying 5 percent weekly compounding interest. It’s a cartoonish interest rate, but it’s clear to me that the penny has dropped in his thinking about savings.

I’m going to have to introduce some new terms soon so he doesn’t bankrupt me. We won’t be opening a savings account though. I think we’ll buy bank stock instead.

Aaron

My kids have had an allowance since they were 7 or 8. I have to say – they’re very careful when they’re spending their own money. Much more so than when they’re spending mine!

And, it is nice to not have to say that they can’t get something — either they have the money for it, or they don’t. At first, we did have to sort through just what was supposed to be covered by their allowance, and what Mom and Dad would cover. We’ve been at it a few years, so we’ve pretty much got it down…although we still disagree from time to time! But, better to discuss all this and have them realize that there are limits, versus them feeling like spending decisions are out of their control and arbitrary.

Karen