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Debt-Proof Your Kids

January 2nd, 2007 at 06:21 pm

I just read this book last night, and found it both enjoyable and helpful. I am a big fan of Mary Hunt's original "Debt-Proof Living" book as it is the first book that I read and really got me on the debt-proof track so to speak.

DPYK is a book she wrote detailing how she and her husband put her sons on a monthly "salary" on the first day of sixth grade. They figured out how much they would normally spend on the child in a typical month (clothes, snacks, school lunches, videogames, etc) and instead of fighting over money with the child, they gave the child that month's "salary" on the first on each month to spend as he wished.

The only rules were that the child had to "give" 10% away (to charity or another needy individual, etc), "save" 10% (in a bank account or other interest-bearing acct), and the other 80% was his to "spend" (they did explain that the money had to be spent on items which were acceptable in the eyes of their family...so no porn magazine binges!) *LOL*

Mary mentions that her 2 sons (who are now in their early 30's) have very different personalities and yet both took to the program and came out financially confident and with an understanding that money must be well managed and respected. Both have no revolving debt and own their own homes.

I am planning on using this system with our DD in the coming years. Does anyone else use this type of system with their children? How has it worked for you?

Posted in Saving Money | 3 Comments »

3 Responses to “Debt-Proof Your Kids”

  1. LuckyRobin Says:
    January 3rd, 2007 at 04:47 am 1167799623
    1167799623

    I've just started something along those lines, though its more of an allowance. They get $20 every 4 weeks. Of that $2 goes to church and $4 goes to a savings account. For every $4 they deposit, I contribute $1 in matching funds. Of the remaining money $2 goes to their piggy banks for short-term savings or gift-buying and $12 is what they have to spend on their own. If they choose to bank any additional money into their savings accounts I will match it 25%. So if they add a dollar I will put in a quarter, on up to $4 more dollars. So the most I will match in a month is $2 total on $8. After that no matching, I'm trying to teach the 401K concept a little.

    Savings accounts can only be accessed for big things. Only the amount they have deposited can be removed. Anything I have put in in matching funds must stay in the account at all times.

    I do not put their hot lunch or milk money into this, though. My son is not quite seven and my daughter is 10, so I don't feel total management is in their best interest at this point. Maybe when my daughter goes to junior high in two years.

  2. mariannej Says:
    January 3rd, 2007 at 06:24 pm 1167848675
    1167848675

    LuckyRobin,

    That sounds like a great plan you've got. I'd be interested in hearing how it works out for you and the kids. How do you differentiate between the piggy bank money and the $12 left over as far as which is spent for what since it sounds like both can be spent by them when they choose?

    Thanks for the input. I have some time to get my new plan in place and I plan on using all the different systems to come up with something that will work for us.

  3. princessperky Says:
    January 4th, 2007 at 02:31 am 1167877885
    1167877885

    right now the kid cost aside from, food is nil, so we can't do that though I like the idea, I currently do let them spend save or donate any gift money.....instiling early the ideas of saving donating and spending I hope will help.

    My daughter wants an 80$ toy stove center thing, and she is confused on how to get up to that amount (saving is for growing, like for when you are older)
    so we now have to intro a concept of saving for something big, but smaller than your future....

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