If you give your kids a weekly allowance, you shouldn’t withdraw payment to punish them for bad behaviour or poor performance.
If you do give them five bucks or so, hand it over on a Sunday night, not on a Friday right after school when everyone is pumped for the weekend.
And, whatever you do, don’t attach chores to their allowance either.
As eyebrow popping as it sounds, those assertions are words of wisdom from the mouth of Richmond financial planner and author Paul Lermitte.
Lermitte, a father of three grown boys, recognizes his advice may fly direct in the face of how many parents were brought up themselves and how they now introduce their children to money.
But in his new book — Allowances, Dollars & Sense — is based on tried and trusted methods he perfected over 20 or so years of bringing up his own children.
“This is about changing the way we teach our kids about money,” said 52-year-old Lermitte, who lives in south Richmond.
“That’s the whole premise. We were all trained by our parents and grandparents and things were different then.
“Today, it requires a little change here and there. What is needed is less conflict.”
Lermitte openly admits he’s a “numbers guy,” but adds that he’s also a “normal parent,” faced by the same trials, tribulations and temptations as the rest.
“I wanted to teach my sons to be astute financial planners,” he said of his initial motivation to share his methods.
“My eldest son was six at the time and was just going into Kindergarten when we started doing this.
“At that age, they are going into a structured world for the first time really, so I thought it was a good time to start teaching him about money.”
Lermitte, however, said he only knew how to help adults with their finances, not kids.
“I found this one book, that was out of print. So I started doing my own research about allowances and finding out from people I knew what their experiences were,” he recalled.
“My biggest thing was not arguing with the kids about money. I didn’t want to have that all the time.”
Not linking your child’s allowance to work or performance is probably the hardest pill for parents to swallow in the book.
Instead, Lermitte attests that the child should get an allowance as being part of the family and that chores should be carried out anyway.
And if schoolwork or behaviour is an issue, the allowance should still be free of any punishment or reward, he says, adding that there are many different ways to punish or reward your child other than paying them or taking away their allowance.
“I came up with that idea after simply talking to people. I really didn’t like the idea of it being a reward or a punishment,” Lermitte said.
“Allowance is a tool. It’s a tool to teach your children to become great money managers for a lifetime.
If they’re going to make mistakes financially, let them make them when they’re young.”
Harking back to the early days of nurturing his kids’ financial acumen, Lermitte fondly remembered one of his sons getting an allowance for the first time.
“My kid bought a toy from Toys R Us. It broke after one day and we took it back,” he said.
“I suggested he perhaps save up and get a better quality product. But he insisted on getting the same toy.
“I told him if this one breaks, we’re not coming back to the store a second time. But he went ahead and bought it anyway.
“It lasted two days this time. We never went back to the store. He wasn’t happy, but I think he learned to think about how he spends his money.”
And not giving them their five bucks until Sunday night — come on, are you serious?
“I used to give them their allowance on a Friday, just like everyone else,” Lermitte said.
“But ‘boom.’ It was blown over the weekend. As adults, what do many of us do when we get paid? We buy stuff, we consume.
“So I started giving them their allowance on a Sunday night. That way, the money is rattling around in their piggy bank all week before they have a chance to spend it.”
Lermitte said the kids get used to having the money all through the week and are then not as inclined to dive in and spend it.
To achieve the best results, give coins rather than notes, he advised.
“It’s a physical thing, the feel, the touch, the sight of a shiny coin. The whole sense of having money and learning how to handle it is what we’re aiming for.
“I know people that place $10 every week electronically into their kids’ accounts. But the kids never get to see the money and don’t appreciate where it comes from.”
It’s not all a free-for-all, however, and there is some parental input into how the money is used.
Her recommends “advising” your kids to consider saving half their allowance for a rainy day or for vacation spending money.
That way, they can save a little and do whatever they want with the rest.
“I used to tell my boys that I’d pay for their food and drinks and things like that on vacation,” Lermitte said.
“But if they wanted to buy something outside of that, they had to pay for it themselves.”
Lermitte’s book — which seeks to answer parents’ questions on how to handle the allowance and open their minds to new ideas — also contains many worksheets and planners for parents to employ.
They’re not for everyone though, admits Lermitte.
“Honestly, there’s only one or two that I used. But some people contacted me after the first book asking for even more worksheets,” he said.
“There’s no hard and fast rule that you have to use everything in the book. You take what you think will work for you and go with it.
“This more than money, it’s about lessons in life. Think about the amount of decision-making we do every day that’s connected to money.”
Most of all, the book is about giving up some or most of the control of your kids’ finances and letting them make their own mistakes early in life.
The theory, Lermitte says, is the kids will learn from their mistakes and become financially aware as teenagers and adults.
“My sons are now grown up and I think they’re pretty good with their finances,” he said.
“One was offered a $20,000 credit card. I advised him to just get a $1,000 limit, just to test it out. What happens, it’s all gone in less than a week. I think he then realized the danger.”
Allowances, Dollars & Sense is available on Amazon, as an ebook and on his website at www.paullermitte.com.