Making Payments to Your Kids

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children and money, cost of raising a child, allowance, financial planning, debt reduction, saving money, personal debt, kids and money

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The following post is by MPFJ staff writer, Travis Pizel. Enjoy!

My wife and I aren’t perfect.  As we fight our way out of credit card debt, we occasionally slip up and overspend.  We had just such an episode in July, and starting the following month, it was all hands on deck to recover from the financial hole we had dug for ourselves.  Unfortunately, during that period, we had to stop paying one of our regular monthly expenses, and are now behind.  Who is that creditor?
Our children.
We had to cut every expenditure we could, which included suspending the weekly allowances of our son, Tristan (13) and our daughter Tori (10) until we could get our budget and spending back on track. Lucky for us, they were very understanding of our situation, and granted us enrollment into a hardship program that gave us 0% interest and no late fees.
Our kids’ weekly allowance is one dollar for each year of their age.  We had to suspend their allowance for six weeks which means we owe them a total of $138.  On September 14th, we sat them down and told them that we were re-instating Friday as allowance day, and handed them each their weekly amount.  We also told them that we would be “making up” the missed weeks by paying them double on selected Fridays.
We could have just walked away from the missed weeks, after all we are their parents and what we say goes, but that just didn’t feel right.   I also thought this would be a great teaching opportunity for our kids.
  • Financial irresponsibility and debt can affect more than just you.   Your debt can affect your significant other, your children, and everyone around you.  I felt like a failure kneeling beside my son’s bed telling him he wouldn’t be getting his allowance for awhile.
  • Never walk away from your debts.  You may not be able to pay right now.  But hopefully, you’ll be able to eventually.  Plan for it and make it happen.  Even if your debt is to your 10 year old daughter.
  • Watch me fail, then watch me overcome:  Our kids don’t know the specifics or the numbers, but they know we’re in a Debt Management Plan.  They’ve watched us fail.  But more importantly, they see us fight back and overcome those failures.  They’ll watch us pay them back the owed allowance, and they’ll be a witness to the day when we make that final payment and be rid of our credit card debt.
Parents commonly say they want their kids to learn from their mistakes.  I want more than that.  I want them to learn how to recover from those mistakes.   I don’t want my kids just to remember the time mom and dad stopped giving them allowance and how they couldn’t buy that new video game like they had planned.  I want them to also remember how mom and dad gave them double allowance for what seemed like forever because they wanted to make it right.

How about you all? What financial lessons are important for you to teach your children? What strategies do you use to facilitate those lessons?

Share your experiences by commenting below!

    ***Photo courtesy of http://www.freedigitalphotos.net/images/Other_g374-Giving_To_The_Poor_p57545.html

    Comments

    1. Travis, you never cease to amaze me with your raw open discussion of your financial challenges. That is what I appreciate most about you, that you hold nothing back.

      You always take complete accountability for your actions, yet, it's not about punishing yourself for making a mistake, it's about recovering and learning.

      That is a quality I so admire about you and your wife. Your children have the very best role models because you respect them enough to be open and honest with them about your finances. You are AWESOME!

      • *blush* thanks Suzanne – I agree that Vonnie and I being very open and honest about our mistakes, and how to recover from them (not only financial, but in every aspect of life) will be something our children will take with them into adulthood. I continue to hope and pray that making those mistakes to begin with become less and less frequent.

        Sincerest thank you for your comment. 🙂
        My recent post What Kind Of People Live Without Credit Cards?

    2. Awe Travis you made me tear up again!!! Great post 🙂

    3. Travis, I completely agree with @scoblentz. Every time I think you have written my favority post, you out-do yourself with an even better one.

    4. Carlos Hank Rhon says:

      These tips are really very useful and commendable and I completely agree with your post.

    5. Thanks for sharing. Your posts are always so insightful. Your kids are lucky to have such wonderful role models. I don't think many parents feel the need to own up to mistakes in front of their kids or even show them how to cope and rebound.

      • *blush* thanks Suzanne – I agree that Vonnie and I being very open and honest about our mistakes, and how to recover from them (not only financial, but in every aspect of life) will be something our children will take with them into adulthood. I continue to hope and pray that making those mistakes to begin with become less and less frequent.

      • That's weird, I'm not sure why my comment to Suzanne was duplicated here. I appreciate your kindness, Andi. When kids are very little, they believe their parents can do anything. As they get older, they realize that they make mistakes…..if parents don't own up to them they'll just destroy their own credibility. It's a huge opportunity to teach your kids something, even if you have to show them you failed.
        My recent post I Will Now Cease Any and All Complaining

    6. Travis again you inspire me!! I always love your posts! Sharing your personal experiences helps others know they are not alone. That making mistakes can be used as a learning experience rather than a pity party! I love your way of working as a family and figuring out new tools and ways to make things come together for all of you!! Thank you for being so open and honest! I know it is not easy!

      • My whole purpose in blogging, Monica, is to communicate what it's really like for a family to struggle to get a grip on how to handle their finances the right way. Some times it is hard to put everything out there, but at the end of the day, this is real life – I'm glad that thus far it seems people can identify with my “adventures.” 🙂 Thanks for reading and leaving your thoughts, Monica!
        My recent post What Kind Of People Live Without Credit Cards?

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