Kids and Quicken

quicken2.gifWhen teaching Junior Achievement classes I always point out that while money can’t buy you happiness (really – studies show that aside from abject poverty money won’t make you happy), mismanaging money can buy you unhappiness.  So we’ve tried to teach our kids how to esteem money properly (give 10% or more back to God, save 10% or more for retirement, avoid all debt except a mortgage and pay it off when you can, etc.)

When the girls were young we went the classic savings account route with them.  But when interest rates kept dropping the message became counterproductive.  The Credit Union interest was 0.2% – not two percent, but point-two percent.  As in 20 cents per year on a $100 account balance – hardly an incentive for savings. 

I closed the accounts and set up accounts for them in my Quicken database.  I started paying them a 10% annual percentage rate and added it to their account once per quarter.  It was a simple way to encourage savings.

It also had the benefit of introducting them to Quicken and tracking their spending.  They now have separate accounts for spending, savings and clothes.

Earlier this year we gave them credit cards to use.  This was a little bit of a concern, since studies show that people spend 18% more when using credit.  But both girls (currently in 9th and 11th grades) watch their savings balances like hawks so they see the balances go down as soon as they buy anything.

The girls use their credit cards for all their purchases then code them into the appropriate accounts in Quicken (clothes, spending, gas, groceries, etc.). 

They also learned how to reconcile the credit card statements in Quicken so they know how that process works.  And they see that credit cards are for convenience and that we only buy things when we have the cash in the bank already.

We give them a normal allowance plus a clothes budget, so they have learned to monitor their spending and make trade-offs (i.e., buy more clothes that are less expensive or fewer clothes that are more expensive, or a mix).  They are terrific shoppers and work hard to get good deals.  We have baseline you’re-part-of-the-family chores (dishes, laundry) though we’ll pay them for extras sometimes.

This process might not work for everyone, but it has been very useful for us. 

Do you have any money management tips to share?

6 thoughts on “Kids and Quicken”

  1. I had the boys loan their money to the farm, and we pay them the same interest we pay the bank.

    I wish I had thought of the credit card idea. They did have checking accounts and paid for their own expenses.

    I have never been able to get them to do a good job of balancing their bank statements. They want to just use their on line balance. They don’t think banks make mistakes.

    They do though. I once had around 3,000.00 debited from my checking account by mistake. When I complained to the bank, they sent a research request to the regional office. They mailed me a copy of a cancled check from a national insurance company that had been deducted from my account, along with a polite letter hoping that I was satisfied. I told them I would not be satisfied unless i got the insurance company’s deposits as well and they gave me my money back.


  2. When my oldest was only about 4, we started her on an allowance, a quarter a week. She would go to the store and point to a coloring book and ask how many quarters that was, then point to a bicycle and ask how many quarters. She really didn’t understand the difference.

    Fast forward to kindergarten, the kids got a token each day they behaved well. At the end of the week, they could spend their tokens on things from the prize box. The teacher told us that they always waited to see how long it took the kids to realize they could save their tokens for a bigger prize.

    My daughter decided the second week to save her tokens. This beat any record the teachers ever saw on savings.

    To this day (age 24) she is one of the most frugal (tightwad is another word) people I know. She gives to her church and she’s gotten to the point where she realizes that she CAN spend, but she’s still very frugal.

    P.S. The same method didn’t work for my other two…


  3. When our boys were younger, we set up a system whereby they had certain chores to do. If they did them to their mother’s satisfaction, then they got paid when I got paid.

    They had three envelopes. One was labeled Giving, one was labeled Savings, and the third was for Spending. They had to put 10% into Giving, 10% into Savings, and the rest they could spend.

    The allowance was substantial because we also made our kids buy their own clothes and other necessities. We discovered that if the kid was buying a new pair of shoes, he would be reasonable. When we had been buying them, the kid wanted the $200 pair of Nike.

    We encouraged them to use Quicken. Two of them do. The other prefers to learn things the hard way…


  4. I encourage my 11 yr old daughter to give 10% to God, 10% to her future, and with the remaining 80%, buy something nice for Dad.


  5. In addition to learning money management, I have noticed several parents who encourage charity early on in their children, and I heartily agree. However, I have found that kids I know fail to get excited by the requisite 10% for God. Here is a way to get kids more excited about giving. Instead of asking for presents from kids at school for their birthdays, have your kids research a charity that they think does good in your community, the nation or the world and ask for donations instead. Good choices are ones which quantify what is done with the money – Heifer International buys specific animals for poor farmers, and other charities say how many children you can educate for your given sum. This makes giving more real, and helps give your children ownership of their project.


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