Making Allowances - Introduction to Allowances Dollars and Sense by Paul W. Lermitte

		this is a safe site
	Introduction from Allowances: Dollars and Sense, by Paul W. Lermitte As a professional financial planner, I thought I would have no trouble coaching my kids to handle money responsibly. But seven years ago, when I decided to give my three sons an allowance to buy candy, toys, running shoes, rollerblades and a million other things, I was just like every other parent. I didn't know where to start or what steps to take. My lack of expertise really surprised me. So my wife and I set out to learn how to teach our kids to handle money. We have used a variety of techniques, and our boys have developed confident money-management skills. In the past seven years, I have developed and refined a complete program to teach my kids about money. I call this The Making Allowances System. My wife and I have been extremely pleased with the results, and this system has also worked for scores of our friends, relatives and associates. Over the years, I have observed that many adults don't know how to handle money responsibly. I believe this is because they didn't handle money enough when they were children. Their parents did all of the spending, banking and saving. They may have received an allowance, but it was used to make small purchases, and unfortunately, they may never have learned how to save money for more expensive items, or for long-term investments. No wonder many adults in our society are hooked on credit cards and live month by month spending all of their income. They never learned some basic money skills as children. If you want your children to grow up to be financially responsible adults, I believe you must let them handle money often. At an early age, they need to handle money and understand the importance of depositing money in a bank on a regular basis. They also need to develop the habit of saving money for major purchases. These lessons will help your children develop a much more comprehensive understanding of money and how to manage it. In fact, I believe that giving an allowance sets the groundwork for good money management because it provides an opportunity for parents to help their children develop good habits that will stay with them for life. If you can teach your children to save, spend and invest responsibly, you will prepare them for a productive, successful life. In this book, I share with you what I've learned about teaching kids about money. But before I get into the details of The Making Allowances System, I'd like to help you identify the dangers and opportunities you face as a parent in regard to your kids and money. Kids and Money: The Dangers As a parent, you face six key dangers if you don't have a system for teaching your kids healthy habits and attitudes about money. Danger 1 Financial Dependency Your children could become financially irresponsible adults. If you don't teach your children properly about money, they could grow up with poor money skills. They may end up spending every cent they earn, living pay cheque to pay cheque. They could become mired in debt or, even worse, they could remain financially dependent on you when you should be saving for, or enjoying your retirement. In fact, how you teach your kids about money now could affect your own personal wealth in the future. Danger 2 Destructive Values Your children could adopt destructive values about money. In today's complex, consumer-oriented, media-saturated world, your kids may adopt values about money which completely contradict the values you hold. For example, they may come to equate money with self worth. They may become hooked on possessions, on keeping up with the crowd, on always staying in fashion. They may adopt the attitude that you are always available to bail them out when they need money; that if they want something, all they need to do is ask for it. They may develop unrealistic expectations, believing that they are entitled to all the latest trends and their happiness depends on having them. Danger 3 The Debt Trap Your children may grow up to have bad money habits and possibly end up in paralizing debt. If you don't teach your kids about money when they're young, they could grow up to be victims of our credit and consumer culture. It's possible they could enter their 20s and 30s not knowing how to set financial goals, how to save money for the future, how to make a budget, how to plan buying decisions and how to be a smart consumer. Newspapers often carry stories of young adults on the financial brink of disaster. Danger 4 Loss of Confidence Without positive money habits and good life skills, your children could become adults lacking the confidence to make the right financial decisions. This lack of financial confidence could affect your children's confidence in other areas of their lives. Danger 5 The Apple Doesn't Fall Far from the Tree Although you want to take an active role in teaching your kids about money, you could teach them the wrong things. For example, you might use money to motivate your kids to score goals or get better report cards. These bribes (which are discussed in Chapter 2: Tricks or Treats) can teach your kids to equate money with success; that money is the only real reward for an achievement. In this way, you might teach your kids the wrong values even when you have all the best intentions. That's why this book stresses the importance of "principles." You and your children need to think about your money principles before you take action. By observing the principles, you'll be less likely to do the wrong thing. Danger 6 Family Conflict You could wreck your family relationships because of conflicts related to money. In my opinion this danger is the most serious. It is not uncommon for families to be torn apart by disputes over business and inheritances. Even when the sums are modest, money-related tensions can arise. This tension between spouses and parents and their children can destroy the love and joy that should be a part of marriage and family life. If you don't have strong principles, and a plan of action, your relationship with your kids could be consumed with arguments over allowance and other financial issues. Since I started developing The Making Allowances System, I've noticed that most parents feel threatened by these dangers - either because they did nothing to teach their kids about money, or because they thought their own good financial habits would somehow rub off on their kids. For the most part, we parents lack the knowledge, structure and tools to teach our kids helpful money management skills. This book was written to help you avoid these dangers. Kids and Money: The Opportunities On the positive side of the ledger, this book will help you take advantage of the many opportunities you have to teach your kids about money. The opportunities are legion, but six major ones stand out. Opportunity 1 Your Kids can Become Financially Responsible Adults If you help your kids develop good money habits when they're young, they will have a better chance of being successful as adults. They'll learn to make choices, become more independent and will know how to set and achieve financial goals. Opportunity 2 Your Kids can Develop Strong Positive Values about Money You have an opportunity to help your kids develop a good attitude towards money; that money is not an end in itself, but a means to achieve more important goals in their life. They can develop a sense of self worth that's not tied to the size of their bank account, nor to the kind of running shoes they wear. As well, if they develop a good attitude toward money, they may be better able to resist the negative aspects of peer pressure. Opportunity 3 Your Kids will Learn Consistent Money Habits and Useful Financial Skills With your help, your kids can grow up knowing how to set financial goals, how to follow a budget and how to handle money on a daily basis. They will also learn to save money regularly, make smart buying decisions, and set their own priorities on spending. Opportunity 4 Your Kids will Develop the Confidence to Make their Own Choices By teaching your kids how to handle their own money from an early age, you will give them increasing confidence to make their own choices. They won't feel they always need to turn to you and other people to make decisions for them. If they develop confidence about money early on, they will be better able to handle increasing responsibility as they get older. As well, their confidence about money will translate into confidence about other areas of their life, such as school, athletics, personal relationships and community involvement. Opportunity 5 You can Teach your Kids the Right Things about Money If you adhere to the proven process in this book, you'll become more confident about teaching your kids. You will see the results throughout their childhood and teens. You'll know you're teaching the right principles the right way. (That's not to say you'll agree with everything I say in this book, but it will help you decide what's right for you, and that will further increase your confidence.) Opportunity 6 You can Improve your Relationship with your Kids by Teaching them about Money As you work with your kids on the concepts, you have the opportunity to discuss thousands of topics. That's because money issues affect virtually every area of our lives. As you progress, you'll learn a lot about your kids, and they'll learn a lot about you. You'll also work as a team, instead of as adversaries. This chance to be a team is, in my mind, the greatest opportunity of all. The Making Allowances System Helping you avoid these dangers and realise these opportunities is the purpose behind The Making Allowances System. It provides the principles, structure and tools you need to teach your kids about money. The system is presented Step-by-Step as a series of distinct concepts (one per chapter) to help support you in your knowledge of money management. Each concept contains four primary components: 1. Achievable Goals For each concept, I provide three goals to achieve along with a time estimate of how long it should take your family to master these goals. All of the principles, structures and tools presented in each chapter are designed to help you achieve these goals. 2. Guiding Principles I present the basic principles of how best to teach your kids each concept. Learning the principles first will give you more confidence when you are teaching your kids. It will also make it easier for your kids to understand why you want them to do things a certain way. Build upon what you are doing well and what you see will be best for each of your children. 3. A Step-by-Step System Lack of structure is one major weakness of most kids and money books. They contain a lot of useful information, but they don't give you any real ideas about how to put this information into action. The Making Allowances System is different. For each concept, I conclude the chapter by giving you a Step-by-Step system to follow. This structure will bolster your confidence, and help your kids learn faster and more effectively. Some chapters, particularly the first six, need to be completed before moving onto the later chapters, and some will follow along as slowly or quickly as your family dictates. 4. Skillsheets, Tips and Traps, and Practical Examples To help you teach your kids important money concepts, and to keep everyone on track, I've provided some practical tools such as skillsheets for your family to work on together (available in this book and on our website www.makingallowances.com). I've also added lots of take-action tips. In addition, I share some kids and money stories from my own life and from the experiences of other people, some real-life, "Slices of Life." Before reading this book, you should know that I, in an attempt to be gender neutral, alternate between the use of "he" and "she," "his" and "her." However, I make no effort to use feminine and masculine pronouns in precisely equal numbers. "Any child is every child, and it is children who are important" (Jean Ross Peterson). So What About You? One thing I've learned about parents: they can often be very hard on themselves. They worry they're not doing the right things, that they're not spending enough time with their kids, that they're too strict or too lax. No matter what they do, they don't think it's enough. Well, if you're in this camp, I'm here to tell you that things aren't as bad as they seem. If you have kids of school age, you owe yourself a pat on the back. You've managed the following: � You've got children. This is a major achievement in itself because you've accepted the responsibility of being a parent, and you've made a huge commitment. � You love your kids. You wouldn't be reading this book if you didn't. You provide a caring, nurturing environment for your kids. � You've helped them develop some important skills and habits. � You've probably started some kind of money program with your kids (allowance, regular savings, bank accounts) and you've established some policies about chores and treats. � You've worked on your own personal financial habits. You may have an RRSP, a regular savings plan, an education savings plan, an investment portfolio and other cornerstones of sound financial planning (i.e. wills and insurance). � You bought this book. That statement might sound self-serving coming from the author, but the fact you bought this book indicates you care a lot about your kids' future. So there you go. Things are a lot better than you might think. All of these accomplishments are the stepping stones to your next stage as a parent: beginning to teach your kids about the world of money. You are ready to begin using The Making Allowances System. Just a Little About Me So why am I qualified to write this book? Well, first of all, I'm a parent myself. I've been using this system with my three boys - Ryan, Patrick and Jeremy - for more than 10 years. I've proven it works with my kids (they've become financially mature teenagers), and with many other parents and their kids. In addition to my qualifications as a parent, I'm also a professional financial planner with more than 15 years of experience. As I mentioned earlier, I've worked with hundreds of individuals and couples, most of whom are parents. I've learned first-hand their own problems, and the challenges they face teaching their kids about money. But most of all, I'm qualified to help you teach your kids because I am passionate about helping parents and their kids learn money management skills. I've developed and tested every principle because I believe everyone can benefit from these skills. The system works and I want to share with you the same good experience I've had with my kids. So I hope you'll join me on this exciting adventure. The Universal Principles In each chapter, I provide several key principles to help you teach and implement each concept. These sub-principles are based on a number of universal principles which you should understand right from the start. These principles are: Universal Principle 1 Talk About It Maintaining an on-going dialogue with your kids is the best way to teach them about money. Whenever you introduce a new concept, or face a showdown over a money-related issue, the most effective way to address it is to talk about it. Choosing an appropriate time to talk is also important. Universal Principle 2 Start Early Ideally, start working with your children at an early age, preferably age five or six. If you wait until your kids are in their teens, it will be more difficult, (but not impossible) to teach them new money principles and concepts. Stick to the system presented in this book to bring your teens to the skill level they need. Universal Principle 3 Give Up Control To learn about money, your kids have to do things themselves. Instead of handling their money for them, let them do it. Let them make deposits and withdrawals from the bank; let them make their own purchases; let them decide what they want to buy with their own money. You can offer advice, but let them do it on their own. It's the best way to learn any new skill. Universal Principle 4 Let your Kids Make Mistakes Even if you think your kids are spending their allowance on the wrong things, let them do it. Don't intervene and take charge. Let them make mistakes. If they mess up, they'll learn the lesson much faster than by listening to a lecture. Making inexpensive mistakes when you are a child and learning from them is far better than making costly mistakes as an adult. Universal Principle 5 Set Limits Although you need to give your kids money for allowance, for treats on special occasions, and for the purchase of "cool" clothes and other stuff, you have to set limits. You have to teach your kids that money doesn't come pouring out of bank machines. They have to learn to make choices based on financial limits. Even if you have a large income, and lots of money to spend on your kids, they will learn to manage money well only if they operate within some kind of set budget. So set limits. Universal Principle 6 Provide Structure As a parent, it's your job to help your kids express their individuality and creativity within a well-defined structure. This is especially important when you teach your kids about money. You need to help them establish a consistent regime of allowance, saving and spending. This type of structure will help them learn faster and with more confidence. How to Make Allowances As you work through The Making Allowances System with your kids, keep a sense of humour. When the unexpected happens - and it will - go with the flow. Improvise. Let your kids make mistakes. Let yourself make mistakes. Make allowances. Most of all, enjoy your relationships with your children. Share Your Stories I hope you and your children enjoy this book. I invite your feedback, advice, and personal stories on the Making Allowances official kids and parents website at www.makingallowances.com. You can also e-mail me at makingallowances@shaw.ca Just Begin As you read, take note of the ideas that particularly grab you. What ideas make sense to you, and seem reasonable to try in your family? You may want to implement the concepts slowly, and limit yourself to one concept per month. Or perhaps you have teenagers, and feel the need to jump in and implement many concepts at once. Whatever your situation, there is help to be had. And remember, you must make allowances for yourself too - you will make mistakes, or handle a situation badly, but you can always start afresh. And you may find that some of the concepts will not work well for you, or may not apply to your particular situation. The important thing is for you and your children to talk about money and learn how to manage it - both independently, and together. I am excited about the adventure before you, and wish you well as you begin to "make allowances." Paul W. Lermitte TOP Site contents � 1999 - 2007 by Paul W. Lermitte	FEATURES

Making Allowances

this is a
safe site

Introduction

from Allowances: Dollars and Sense, by Paul W. Lermitte

As a professional financial planner, I thought I would have no trouble coaching my kids to handle money responsibly. But seven years ago, when I decided to give my three sons an allowance to buy candy, toys, running shoes, rollerblades and a million other things, I was just like every other parent. I didn't know where to start or what steps to take. My lack of expertise really surprised me. So my wife and I set out to learn how to teach our kids to handle money. We have used a variety of techniques, and our boys have developed confident money-management skills. In the past seven years, I have developed and refined a complete program to teach my kids about money. I call this The Making Allowances System. My wife and I have been extremely pleased with the results, and this system has also worked for scores of our friends, relatives and associates.

Over the years, I have observed that many adults don't know how to handle money responsibly. I believe this is because they didn't handle money enough when they were children. Their parents did all of the spending, banking and saving. They may have received an allowance, but it was used to make small purchases, and unfortunately, they may never have learned how to save money for more expensive items, or for long-term investments. No wonder many adults in our society are hooked on credit cards and live month by month spending all of their income. They never learned some basic money skills as children.

If you want your children to grow up to be financially responsible adults, I believe you must let them handle money often. At an early age, they need to handle money and understand the importance of depositing money in a bank on a regular basis. They also need to develop the habit of saving money for major purchases. These lessons will help your children develop a much more comprehensive understanding of money and how to manage it. In fact, I believe that giving an allowance sets the groundwork for good money management because it provides an opportunity for parents to help their children develop good habits that will stay with them for life. If you can teach your children to save, spend and invest responsibly, you will prepare them for a productive, successful life.

In this book, I share with you what I've learned about teaching kids about money. But before I get into the details of The Making Allowances System, I'd like to help you identify the dangers and opportunities you face as a parent in regard to your kids and money.

Kids and Money: The Dangers
As a parent, you face six key dangers if you don't have a system for teaching your kids healthy habits and attitudes about money.

Danger 1
Financial Dependency

Your children could become financially irresponsible adults. If you don't teach your children properly about money, they could grow up with poor money skills. They may end up spending every cent they earn, living pay cheque to pay cheque. They could become mired in debt or, even worse, they could remain financially dependent on you when you should be saving for, or enjoying your retirement. In fact, how you teach your kids about money now could affect your own personal wealth in the future.

Danger 2
Destructive Values

Your children could adopt destructive values about money. In today's complex, consumer-oriented, media-saturated world, your kids may adopt values about money which completely contradict the values you hold. For example, they may come to equate money with self worth. They may become hooked on possessions, on keeping up with the crowd, on always staying in fashion. They may adopt the attitude that you are always available to bail them out when they need money; that if they want something, all they need to do is ask for it. They may develop unrealistic expectations, believing that they are entitled to all the latest trends and their happiness depends on having them.

Danger 3
The Debt Trap

Your children may grow up to have bad money habits and possibly end up in paralizing debt. If you don't teach your kids about money when they're young, they could grow up to be victims of our credit and consumer culture. It's possible they could enter their 20s and 30s not knowing how to set financial goals, how to save money for the future, how to make a budget, how to plan buying decisions and how to be a smart consumer. Newspapers often carry stories of young adults on the financial brink of disaster.

Danger 4
Loss of Confidence

Without positive money habits and good life skills, your children could become adults lacking the confidence to make the right financial decisions. This lack of financial confidence could affect your children's confidence in other areas of their lives.

Danger 5
The Apple Doesn't Fall Far from the Tree

Although you want to take an active role in teaching your kids about money, you could teach them the wrong things. For example, you might use money to motivate your kids to score goals or get better report cards. These bribes (which are discussed in Chapter 2: Tricks or Treats) can teach your kids to equate money with success; that money is the only real reward for an achievement. In this way, you might teach your kids the wrong values even when you have all the best intentions. That's why this book stresses the importance of "principles." You and your children need to think about your money principles before you take action. By observing the principles, you'll be less likely to do the wrong thing.

Danger 6
Family Conflict

You could wreck your family relationships because of conflicts related to money. In my opinion this danger is the most serious. It is not uncommon for families to be torn apart by disputes over business and inheritances. Even when the sums are modest, money-related tensions can arise. This tension between spouses and parents and their children can destroy the love and joy that should be a part of marriage and family life. If you don't have strong principles, and a plan of action, your relationship with your kids could be consumed with arguments over allowance and other financial issues.

Since I started developing The Making Allowances System, I've noticed that most parents feel threatened by these dangers - either because they did nothing to teach their kids about money, or because they thought their own good financial habits would somehow rub off on their kids. For the most part, we parents lack the knowledge, structure and tools to teach our kids helpful money management skills. This book was written to help you avoid these dangers.

Kids and Money: The Opportunities
On the positive side of the ledger, this book will help you take advantage of the many opportunities you have to teach your kids about money. The opportunities are legion, but six major ones stand out.

Opportunity 1
Your Kids can Become Financially Responsible Adults

If you help your kids develop good money habits when they're young, they will have a better chance of being successful as adults. They'll learn to make choices, become more independent and will know how to set and achieve financial goals.

Opportunity 2
Your Kids can Develop Strong Positive
Values about Money

You have an opportunity to help your kids develop a good attitude towards money; that money is not an end in itself, but a means to achieve more important goals in their life. They can develop a sense of self worth that's not tied to the size of their bank account, nor to the kind of running shoes they wear. As well, if they develop a good attitude toward money, they may be better able to resist the negative aspects of peer pressure.

Opportunity 3
Your Kids will Learn Consistent Money Habits and Useful Financial Skills

With your help, your kids can grow up knowing how to set financial goals, how to follow a budget and how to handle money on a daily basis. They will also learn to save money regularly, make smart buying decisions, and set their own priorities on spending.

Opportunity 4
Your Kids will Develop the Confidence to Make their Own Choices

By teaching your kids how to handle their own money from an early age, you will give them increasing confidence to make their own choices. They won't feel they always need to turn to you and other people to make decisions for them. If they develop confidence about money early on, they will be better able to handle increasing responsibility as they get older. As well, their confidence about money will translate into confidence about other areas of their life, such as school, athletics, personal relationships and community involvement.

Opportunity 5
You can Teach your Kids the Right Things about Money

If you adhere to the proven process in this book, you'll become more confident about teaching your kids. You will see the results throughout their childhood and teens. You'll know you're teaching the right principles the right way. (That's not to say you'll agree with everything I say in this book, but it will help you decide what's right for you, and that will further increase your confidence.)

Opportunity 6
You can Improve your Relationship with your Kids by Teaching them about Money

As you work with your kids on the concepts, you have the opportunity to discuss thousands of topics. That's because money issues affect virtually every area of our lives. As you progress, you'll learn a lot about your kids, and they'll learn a lot about you. You'll also work as a team, instead of as adversaries. This chance to be a team is, in my mind, the greatest opportunity of all.

The Making Allowances System
Helping you avoid these dangers and realise these opportunities is the purpose behind The Making Allowances System. It provides the principles, structure and tools you need to teach your kids about money. The system is presented Step-by-Step as a series of distinct concepts (one per chapter) to help support you in your knowledge of money management. Each concept contains four primary components:

1. Achievable Goals
For each concept, I provide three goals to achieve along with a time estimate of how long it should take your family to master these goals. All of the principles, structures and tools presented in each chapter are designed to help you achieve these goals.

2. Guiding Principles
I present the basic principles of how best to teach your kids each concept. Learning the principles first will give you more confidence when you are teaching your kids. It will also make it easier for your kids to understand why you want them to do things a certain way. Build upon what you are doing well and what you see will be best for each of your children.

3. A Step-by-Step System
Lack of structure is one major weakness of most kids and money books. They contain a lot of useful information, but they don't give you any real ideas about how to put this information into action. The Making Allowances System is different. For each concept, I conclude the chapter by giving you a Step-by-Step system to follow. This structure will bolster your confidence, and help your kids learn faster and more effectively. Some chapters, particularly the first six, need to be completed before moving onto the later chapters, and some will follow along as slowly or quickly as your family dictates.

4. Skillsheets, Tips and Traps, and Practical Examples
To help you teach your kids important money concepts, and to keep everyone on track, I've provided some practical tools such as skillsheets for your family to work on together (available in this book and on our website www.makingallowances.com). I've also added lots of take-action tips. In addition, I share some kids and money stories from my own life and from the experiences of other people, some real-life, "Slices of Life."

Before reading this book, you should know that I, in an attempt to be gender neutral, alternate between the use of "he" and "she," "his" and "her." However, I make no effort to use feminine and masculine pronouns in precisely equal numbers. "Any child is every child, and it is children who are important" (Jean Ross Peterson).

So What About You?
One thing I've learned about parents: they can often be very hard on themselves. They worry they're not doing the right things, that they're not spending enough time with their kids, that they're too strict or too lax. No matter what they do, they don't think it's enough. Well, if you're in this camp, I'm here to tell you that things aren't as bad as they seem. If you have kids of school age, you owe yourself a pat on the back. You've managed the following:

� You've got children. This is a major achievement in itself because you've accepted the responsibility of being a parent, and you've made a huge commitment.
� You love your kids. You wouldn't be reading this book if you didn't. You provide a caring, nurturing environment for your kids.
� You've helped them develop some important skills and habits.
� You've probably started some kind of money program with your kids (allowance, regular savings, bank accounts) and you've established some policies about chores and treats.
� You've worked on your own personal financial habits. You may have an RRSP, a regular savings plan, an education savings plan, an investment portfolio and other cornerstones of sound financial planning (i.e. wills and insurance).
� You bought this book. That statement might sound self-serving coming from the author, but the fact you bought this book indicates you care a lot about your kids' future.

So there you go. Things are a lot better than you might think. All of these accomplishments are the stepping stones to your next stage as a parent: beginning to teach your kids about the world of money. You are ready to begin using The Making Allowances System.

Just a Little About Me
So why am I qualified to write this book? Well, first of all, I'm a parent myself. I've been using this system with my three boys - Ryan, Patrick and Jeremy - for more than 10 years. I've proven it works with my kids (they've become financially mature teenagers), and with many other parents and their kids.

In addition to my qualifications as a parent, I'm also a professional financial planner with more than 15 years of experience. As I mentioned earlier, I've worked with hundreds of individuals and couples, most of whom are parents. I've learned first-hand their own problems, and the challenges they face teaching their kids about money.

But most of all, I'm qualified to help you teach your kids because I am passionate about helping parents and their kids learn money management skills. I've developed and tested every principle because I believe everyone can benefit from these skills. The system works and I want to share with you the same good experience I've had with my kids. So I hope you'll join me on this exciting adventure.

The Universal Principles
In each chapter, I provide several key principles to help you teach and implement each concept. These sub-principles are based on a number of universal principles which you should understand right from the start. These principles are:

Universal Principle 1
Talk About It

Maintaining an on-going dialogue with your kids is the best way to teach them about money. Whenever you introduce a new concept, or face a showdown over a money-related issue, the most effective way to address it is to talk about it. Choosing an appropriate time to talk is also important.

Universal Principle 2
Start Early

Ideally, start working with your children at an early age, preferably age five or six. If you wait until your kids are in their teens, it will be more difficult, (but not impossible) to teach them new money principles and concepts. Stick to the system presented in this book to bring your teens to the skill level they need.

Universal Principle 3
Give Up Control

To learn about money, your kids have to do things themselves. Instead of handling their money for them, let them do it. Let them make deposits and withdrawals from the bank; let them make their own purchases; let them decide what they want to buy with their own money. You can offer advice, but let them do it on their own. It's the best way to learn any new skill.

Universal Principle 4
Let your Kids Make Mistakes

Even if you think your kids are spending their allowance on the wrong things, let them do it. Don't intervene and take charge. Let them make mistakes. If they mess up, they'll learn the lesson much faster than by listening to a lecture. Making inexpensive mistakes when you are a child and learning from them is far better than making costly mistakes as an adult.

Universal Principle 5
Set Limits

Although you need to give your kids money for allowance, for treats on special occasions, and for the purchase of "cool" clothes and other stuff, you have to set limits. You have to teach your kids that money doesn't come pouring out of bank machines. They have to learn to make choices based on financial limits. Even if you have a large income, and lots of money to spend on your kids, they will learn to manage money well only if they operate within some kind of set budget. So set limits.

Universal Principle 6
Provide Structure

As a parent, it's your job to help your kids express their individuality and creativity within a well-defined structure. This is especially important when you teach your kids about money. You need to help them establish a consistent regime of allowance, saving and spending. This type of structure will help them learn faster and with more confidence.

How to Make Allowances
As you work through The Making Allowances System with your kids, keep a sense of humour. When the unexpected happens - and it will - go with the flow. Improvise. Let your kids make mistakes. Let yourself make mistakes. Make allowances. Most of all, enjoy your relationships with your children.

Share Your Stories
I hope you and your children enjoy this book. I invite your feedback, advice, and personal stories on the Making Allowances official kids and parents website at www.makingallowances.com. You can also e-mail me at makingallowances@shaw.ca

Just Begin
As you read, take note of the ideas that particularly grab you. What ideas make sense to you, and seem reasonable to try in your family? You may want to implement the concepts slowly, and limit yourself to one concept per month. Or perhaps you have teenagers, and feel the need to jump in and implement many concepts at once. Whatever your situation, there is help to be had. And remember, you must make allowances for yourself too - you will make mistakes, or handle a situation badly, but you can always start afresh. And you may find that some of the concepts will not work well for you, or may not apply to your particular situation. The important thing is for you and your children to talk about money and learn how to manage it - both independently, and together. I am excited about the adventure before you, and wish you well as you begin to "make allowances."

Paul W. Lermitte

TOP

Site contents � 1999 - 2007 by Paul W. Lermitte

FEATURES