Getting my Daughter to Make a Budget

...only required that I deny her an advance on her allowance.

I am doing my best to teach my kids how to take care of themselves financially. With both of them, I required that they read The Kids Money Book prior to receiving an allowance or spending any money received as gifts. (This rule did not apply prior to an age where the book was readable.) Additionally, the allowance was predicated on them maintaining an account book and putting half of their money into savings.

My son read the money book instantly and began receiving his allowance as soon as he was able. My daughter put off reading the money book for three years and repeatedly had to deal with my refusals to allow her to spend her money. She finally got around to reading it early this year. She now maintains her account book and is doing very well with that. She also spends her money almost before it has a chance to settle in her pockets.

Recently, she and I took a bike ride on the boardwalk in Pacific Beach. There are some very nice stores there and my daughter decided to stop and shop in one of them. While I watched the bikes, she went in to look for a hat. She came back out and excitedly told me about a hat she just had to have. Unfortunately, it cost $2 more than she had available. She begged for a loan.

I almost loaned her the money. I had been firm with her up to that point, but I started thinking about how responsible she had been and how long it might be before we came back, but I decided to turn her down and live with the sulking just to see what would happen.

She was very disappointed, but didn't sulk. She went back into the store dejectedly to see if there was anything she could buy with the funds she had. In the end, the storekeeper sold her the hat she wanted at a $2 discount. She was elated and I wondered what effect his generosity would have. Would she learn that begging paid off?

Nope. A few days later, she opened her account book and in the back of it wrote a list of the things she wanted to save for. She very seriously told me that she intended to save her money so that things like the near-miss on the hat never happened again. My one little "No" changed her from a spending maniac into a saver.

She still falls off the wagon from time to time, but she acknowledges that these events are her own doing and understands the effect it has on future purchases. That's about all a dad can ask for.

For more posts of families and finances, visit this week's Carnival of Family Life, Festival of Frugality and Carnival of the Capitalists.