Last week a friend's daughter graduated from high school. We celebrated with the family following the ceremony, and caught up with some old friends we haven't seen in long time.
On the way out, I said to the graduate's father, "be sure to bring those presents inside--there are some very valuable envelopes there." He said of course he would, but added that his daughter doesn't really seem to know the value of money, "How do you teach them the value of a dollar; I have no idea?" He went on to tell us how, when she needs money, they give her money; twenty-dollar bills seem to fly out the door with her daily. He knew this approach was not instilling a great sense of fiscal responsibility in his daughter.
On the drive home, I remembered the rather complex financial system my mom set up in our household while I was growing up. We didn't have a whole lot of money, but my mom was good with it. I either inherited that gene from her, or the system she worked out set me up for a financially savvy future.
On the 1st and the 15th of each month, when my dad got paid, I got an allowance of $15. Mine was one of the larger allowances among my friends, but from that allowance, I was expected to purchase everything I would need (including clothes--which most of my friends received on top of their allowances). If I spent my money on candy, records, movies, or fast food, I was on my own. If I spent money on clothes though, my mom would match me dollar for dollar up to $15 per month.
It was kind of a clothes 401(k) matching program. I usually spent my money on clothes. I do remember, though, having enough saved to buy an $80 stereo at Thrifty's Drugstore at one point. I think I was a pretty good saver.
When I was 15, I got a job at H. Salt Fish and Chips. Everyone I knew had a job at some fast-food joint. Even at $2.65 an hour, the money added up a whole lot quicker than an allowance (which I no longer received, since I had a job). I really saved a lot during that time. I liked having the money so much, I hardly ever spent it on anything (except, of course, clothes).
I don't have kids, so don't really know whether the allowance system still exists. I do know that none of my friends' kids work during the school year (maybe a couple have summer jobs). I think nowadays parents want their kids focusing on school work rather than fast food work. This may serve them better in the long run, college-wise and career-wise, but probably at the expense of learning a little financial savvy.
Not to mention never getting to have the experience of coming home smelling like greasy fish!