When it was time to give my children an allowance my motherly instinct told me to proceed with caution. I managed our family finances by check and credit cards so when it was time to pay allowances I didn’t have cash to pay them. In a moment of inspiration (or desperation), I paid my kids with virtual money, like direct deposit. This became the basis for The No-Cash Allowance, a money management system that helps children learn to manage both cash and cashless transactions.
My name is Lynne Finch. I’m a mom who started her own publishing company to produce a very practical guide for teaching your children how to manage money. I didn’t set out to be both author and publisher. My book proposal made the rounds to many publishers because I liked the prospect of someone else paying the printing bill. Some were interested, if I agreed to contain my ideas about kids and allowances in one chapter of a big book about money management and investment.
Because I believed in The No-Cash Allowance, I invested my own money to publish the book. It’s about kids and allowances, but more importantly it is about kids learning to make and understand their own money decisions. When my book finally rolled off the press our kids had left the nest. We knew that our system was successful: they never once called home from college to ask for money and they never moved back.
This blog is also about kids and money management, more specifically, how parents can help kids prepare for their financial future. As parents and grandparents we have to be concerned about what’s happening with our national debt. My grandparents immigrated to our country believing life would be better for the next generation. Now, as my young grandchildren are growing up under our country’s enormous financial burden I’m not confident that their future will be better. Even if we get our national debt under control we can expect to see higher taxes and less discretionary income.
I believe that by teaching kids to make thoughtful day-to-day money decisions parents can help their children survive and prosper even in times of fiscal adversity. Knowing how to manage virtual money–money that can’t be seen or touched–is an essential survival skill for the next generation.
Let me leave you this week with this quote from Ayn Rand, author of Atlas Shrugged. “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” In future posts we’ll look how and why kids need to learn to use money to prepare them to be financially independent adults.