Teaching a Six Year Old to Save

As many of you know, we’ve developed a fairly effective allowance system for our kids. Each week we sit down and pay our kids in proportion to their age ($0.50/week for each year of age), which gets split into charity (10%, which goes to the charity of their choice), long term savings (30%, which gets put into an ING Direct account — click through for a $25 account opening bonus), and spending money (60%, which is used whenever and however they want).

Not only has this system been good math practice for them, but it also gives them a bit of pocket change, and it’s worked wonders when it comes to keeping them from begging for stuff when we’re at the store.

In general, our kids have gotten pretty good at saving up for things that they want. But this past weekend I was totally blown away when I helped our six year old count up his spending money. He had a bit over $42! Given that he takes in a total of $3/week, with just $1.80/week going into spending money, this corresponds to over 23 weeks of saving!

When I told him how impressive this was, he said that he thought he had almost enough to buy Pokemon Leaf Green and still have a bunch of money left over. That’s right… He’s not only saving up for a fairly big purchase, but he’s also waiting to pull the trigger until after he’s built up enough of a cushion to buy it and still have a pocketful of money left over.

To be honest, I’m not sure where he picked this up. We haven’t really talked about this sort of stuff with him in the past, so I’m guessing that he just figured it out on his own. My best guess is that he doesn’t like the feeling of being broke, so he’s decided to save up more than he needs before buying something. Whatever we’re doing seems to be working — if only everyone had this kind of restraint.

Oh, and like the fiscally responsible little guy that he is, he wants me to help him buy his Pokemon game on eBay to save money (he didn’t pull that one out of thin air — we’ve done this before). For those that aren’t aware, eBay is a great source for used GameBoy games; the cartridges are pretty durable, so there’s little reason to buy new when you could save a few bucks buying used.