Handling kids money

[Nenibay]

What do you do with money that your kids get for random things? DD1 is 5 and got about $40 for her bday from various relatives. She also got tons of toys and clothing so that she doesn't need anything. Up until now I've always just put the money in her savings act but now she knows what money can buy lol. I'm wondering what people normally do, it's her money but I don't want her to blow it all on random crap from the $ store.
Maybe half savings, half fun money? Or I was thinking of telling her we could save it for adventures. Like extra spending money at the zoo or what not. Any other ideas. I know it's not a ton of money but I'd like to get a system in place for future funds she may get as well.
Thanks.

[Deleted]

At 4, we let DS blow it on random crap. It's his money. If you don't want it spent on the dollar store, take her somewhere to spend it that you approve of (like the zoo).

As a kid, you have so little chance to make money. Birthdays and Christmas are kind of "it", other than allowance. If you're not doing allowance yet, you might also want to consider that.

[Deleted]

We handle it differently every time.

Usually about half needs to go into savings and half is theirs to spend. Unless they are saving up for something in particular. Like last year my oldest wanted a kindle fire so she was saving and she asked for money for her birthday to get one. She had enough money to get it with her birthday money so we didn't make her save very much that time. She still saved like 10% maybe.

Part if learning about money is blowing it on dumb crap so you learn that if you do that you don't have it when you really want something.

[cricketwife]

We aren't there yet. He is 1 so I just save all of it for him, lol. You're welcome, DS. But what I hope to do in the future is have three banks, save, give, spend. Our library just did a program and they called it, "for me, for you, for later" which I think is kid-friendlier language. I don't know if this is a realistic plan, but I like the idea.

[adhdfashion]

I throw it in their college funds. But they don't understand money yet. A 50/50 split between fun and savings, is what my parent's did. I will probably do the same.

[kershnic]

We plan to so some ratio of save/spend/donate, though I don't know what the ratio will be.

[turtlegirl]

We still just do the savings account mostly at age 4. Maybe for his birthday in a few months when he turns 5 we will do the half savings, half spending thing.

[catwithspots]

We do 50% in savings. With the remaining 50%, 20% to Church offerings (pre-school class accepts offerings to support the sister pre-school class in other country) and the rest is theirs to spend.

With 40: 20-savings, 4-church, 16- to spend. We started this when DD was in Kinder. For the toddler, it all goes to savings.

[MadamePresident]

When I was a kid I had a budget. My mom would make me record in a ledger when I received money and how much.

Then it was divided into three or four categories. I always gave 10% Then I would normally divide the rest into thirds. 30 % to save, 30% to spend, 30% for a long term savings goal, like a new bike.

I learn to be responsible for money at a very young age. I was able to buy a car and pay for college without ever taking out a loan. I will do something similar with my children when they get older

[imojoebunny]

My kids usually get $250 for birthdays and Christmas from grandparents, aunts, ect. I sometimes use it for big things, like camp, sometimes for memberships to things like the zoo, and sometimes I put it in savings. Since it is $1k a year between the two of them, I usually end up spending half on experiences and saving half. Now that they are a bit older, 9 and 6, I sometimes let them have $50 added to their allowance, since we travel a lot and that let's them buy things on our trips, and it being their money makes them more discriminating.

They get allowance to learn money management, and it has worked well. I do not make them save, give, or spend, they get to decide. When they get to middle school, I will start with the "If you want a car" you need to save long term. For now, they just get enough to buy the amount of toys I view as reasonable.

[jeaniebueller]

Some of it gets put in his bank account for saving. Smaller amounts go into his piggy bank, as he has a few items on his wish list that he is saving for.

[thebreakfastclub]

Aug 5, 2015 12:44:26 GMT -5 MadamePresident said:

I learn to be responsible for money at a very young age. I was able to buy a car and pay for college without ever taking out a loan. I will do something similar with my children when they get older

You must have received a ton of birthday and holiday money then.  I started college in the dark ages of 1993 and it was $12,000 a year.  $50 for 18 birthdays didn't do much. 

[MadamePresident]

Aug 5, 2015 13:30:28 GMT -5 thebreakfastclub said:

Aug 5, 2015 12:44:26 GMT -5 MadamePresident said:

I learn to be responsible for money at a very young age. I was able to buy a car and pay for college without ever taking out a loan. I will do something similar with my children when they get older

You must have received a ton of birthday and holiday money then.  I started college in the dark ages of 1993 and it was $12,000 a year.  $50 for 18 birthdays didn't do much. 

Not a lot, although I did have grandparents that lived far away and would generally send money. It was the principles I learned with birthday money and allowance that helped me make good financial choices as a young adult.

I also got decent scholarships and went to the community college my first two years of college.

[pooh8402]

My parents put all my gift money in my savings account. If I wanted fun money, I had to earn it... even if it was like $5 for chores or "helping" my grandmother at her store.

[drloretta]

With that kind of $ I'd probably put half of it in her savings account and let her blow the rest.

DH has started picking a budget for DD when we go to big events (Renaissance Faire, arcade, etc) so she can start figuring out how to best use it. She's starting to pick up on it.

[Nenibay]

So many great suggestions, thank you. I think I'm gonna do some ratio of spending and savings. Maybe just 50/50 at this point. We need to get better and chores and allowance, I would love for her to be more involved in earning money and then deciding where it gets spent.