Kid’s Ledger – Developing Financial Intelligence (and basic competence, dammit!)

“Ugh, not another one of these.”

This past year in school, Little Miss learned about commerce. She became particularly interested in marketplaces and started making all sorts of crap to sell.

She tried to sell us, her customer base, scraps of paper and weird little creatures made out of foam paper called sushi monsters (love the name by the way, hated having them all over my house). Then she priced all the stuff in our house and tried to sell it back to us. Even the dog was for sale.

Dog for sale only $5!

This particular dog is always trying to find a new home anyway, so why not get a little money for it.

Little Miss threw a few free items in there (mostly Mr. TJL’s action figures). They belonged to us anyway, so we gladly took these off her hands.


Partly because I am a terrible mother and partly because I don’t carry cash, I did not buy her worthless crap (I certainly didn’t buy that dog back!).

Instead, I decided that since she wanted to make some money, she should offer a service. I used the opportunity to set up a bi-monthly allowance in exchange for actual chores.

Here was the deal.

She would receive her age in dollars every two weeks. She could spend 50% of the allowance and put the other half in the Bank of Mom (an envelope I keep in the kitchen). Once she accumulates enough cash in the Bank of Mom, we will invest the money and add to it once a month in a real account.

Every year on her birthday, she will receive a raise. The chores will adapt with her competence, just like a real job.

Skeptic note: I know, only sycophant, brown-nosers get promotions and raises, but that is a lesson she will have to learn later. For now, I am perpetuating the myth that hard work reaps rewards.

To receive her earnings she must:

  • Wash the dishes at least 3 nights a week
  • Help with the weekly laundry
  • Help clean the bathrooms


Since she is still in training, we have to help her with her chores. This is no big deal since we are doing these chores regularly anyway, but now we have to slow down and include her in the task. It is a great way to learn basic life skills.


A tale of warning and intrigue

Speaking of basic life skills, let me tell you a story.

Several years ago, a young engineer in his mid-twenties revealed to me that he did not know how to do laundry. Instead of washing his clothes, he would buy new clothes when the other clothes got dirty. He had hundreds of pairs of jeans, it was ridiculous! I offered teach him how to do laundry, that is was so easy! He declined because his future wife from an arranged marriage situation would be arriving in a few months and she could start cleaning all his dirty clothes.

Honestly, I had no idea how to respond and assumed it was a cultural thing so I butted out. But seriously, a grown-ass man who cannot manage to learn a few essential life skills is not my idea of a good life-long help-mate.

He drowned in a swimming pool a year later, leaving behind a widow. I guess he couldn’t be bothered to learn to swim either.

“Not to be insensitive, but this tale warns of two types of drowning”

Lesson learned

I don’t want Little Miss to drown in a pool, so she takes swim lessons. But more than anything, I don’t want her to become a helpless adult. She should learn how to do the basics to manage a household and live a sanitary and frugal life. I do not want her to feel she has to out-source every facet of her home life because we didn’t take the time to teach these skills.

The fact that she is starting the habit of saving half of her income is an added benefit. I have noticed that she mentally budgets when making a purchase and carefully weighs whether she wants to blow all of her spending money, or keep a little for something she might want later. It might not stick, but it is a good start.

What little money steps help develop your child’s financial intelligence?

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4 Responses to Kid’s Ledger – Developing Financial Intelligence (and basic competence, dammit!)

  1. this is so awesome! For us, we do not buy them anything, we just give them montly money and they have to make a list and plan for what they want to buy and plan for it. It has been incredible that they no longe ask for everything since they feel it is in their control. “Put it on the list” i tell them, and then plan how long to get it. I also tell them that if they dont spend anything for 3 months they get a match – little by little hope they get the concept of delayed gratification.

    Chores – they went to Montessori schools when little where practical life was a huge part of the curriculum. They have chores but we don’t pay them for them, instead we tell them we all chip in as we all live here. I get grumpy responses most of the time but work in progress lol.

    Totally agree with the adult skills, I had that issue with cooking. It feels crappy for yourself too! I want my kids to have basic life skills, so we pay attention to that. This is inclusive of financial literacy which should be mandatory in school.

    • says:

      The list idea is great! Little Miss also went to Montessori in pre school and she seemed most interested in life skills (and not so much anything else at all ). We hold the same philosophy about home life in that we all share responsibility for the chores, but now I am willing to tie an allowance to some of them and handing over the power to buy stuff to her. She still asks me to buy stuff (like every time we go to a store) but now I can remind her that she has her own money and if she is broke then that is something she can save for. Beats saying no all the time.

  2. Oh and we play monopoly and recently I started playing Minecraft with them to introduce concept of mortgages. The 6 year old is too young but the 8 year old actually cared for like 5 minutes. Winning!

    The older one actually likes pretending to make budgets in excel when he saw me do that once so we are slowly making one for the list of toys he wants and mark the prices next to each along with how many months of savings it would take for different combinations….

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