2007/07/25

Rich kids, poor dad

Yes, this post is about financial education but it is more about two kids (both rich) instead of two dads (there's only a poor one here).

As a part of our financial education Alyssa and Vivian are starting to have their monthly allowance. Trying to set the amount of money they should have is a difficult task. We once read about a rule that the kids' allowance should be

(Dad's income / 1000) * kid's age

This looks like a good and reasonable formula to us but it also creates a big problem of Alyssa will always has more than Vivian and David at any given time for all their childhood. From what I know about Vivian's personality I guess she probably won't protest about this but I just don't have the heart to tell her that she is getting less just because she is two years younger. I understand that older kids probably should develop the ability to manage more money but I just don't want to hurt the younger ones' feeling.

I grow up as the second-born and the fact that my brother always seemed to have more than I do gave me a extremely unhappy childhood experience and I really don't want any of my children to have that experience. My grandpa from my dad's side is very old-fashioned and believes that the first grandson is the most important kid in our huge family. My brother always have twice as many (or twice as good) for anything we get from grandpa, and that sends a clear message that we are just not worthy of his love simply because we are a couple years younger.

Anyway we decided that Alyssa is getting $10 per month and Vivian will have the same amount for now until we can work out a better solution to this dilemma. So my kids are really wealthy now (at least in my standard). I only started to have my allowance when I was 12 and I was getting less than $10 at that time, so they are REALLY rich in my book even after adjusted for inflation and everything.

Having made these decisions, Ann have them hold off spending any money for a couple weeks and think throughly about what they really want to do with their allowance. In the end Alyssa decided to buy a 400-page coloring book from Michaels and Vivian decided to get a bald eagle finger puppet from the library store. With some money left after getting the things they wanted the most, they each got a box of cookies from Earthfare to share with the whole family. Ann and I are happy with the decisions they made and are very curious about they will do next month.
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