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By Joseph Warren Kniskern, Esq.

Remarriage Finances: Planning For A Family Merger — Not A Hostile Takeover

Part 12 — Making Allowances: Modeling Good Financial Conduct For All Children In A Blending Family

In this final installment of our series examining remarriage financial issues, we review how important it is to teach financial responsibility to children in our blending families.

There's no doubt about it—finances are a major factor in so many blending family decisions! Certainly it is no less so in dealing with children. It can be used as positive reinforcement, encouraging a child to mature and grow in assuming responsibilities and developing proper, godly values. Or it can become a destructive tool, such as when a stepparent uses it to buy the compliance or affection of a stepchild. Will the children in the blending family become accustomed to gifts and few hardships in life, or learn the true value of material things through hard work, patient saving, and rewards for excellence? Parents who wrap their children in a protective bubble with no financial struggles unwittingly deprive them of learning the basic skills of life management which will enable them to cope with an unforgiving world.

Our blending family frequently vacations in Juno Beach, Florida right on the beach fronting the Atlantic Ocean. It is such a beautiful patch of God's earth, with crystal clear waters in wonderful hues of turquoise. It is no wonder that this stretch of sand has been a favorite nesting place for many sea turtles, even despite the encroaching developments along the shore. We love to watch the enormous "momma turtles" lumber slowly out of the water late at night. These turtles exercise tremendous strength in paddling uphill through the sand before digging out a hole to lay their eggs and return, exhausted, to the sea. But this event is a double blessing. A few months later, the eggs hatch, and the sand over the nest bubbles and boils as dozens of little turtles fight their way up to the surface and instinctively begin their long march to the sea and new life. Seeing these little critters sashay down the beach with their tiny flippers working so hard makes anyone want to step in and help them out by carrying them to the water. But that's the worst thing to do! Why? Because God created these creatures to struggle through the sand before hitting the water so they would build up sufficient strength to live in the sea. Without this vital new life exercise, the baby turtles have a much lower chance of survival. And so it is true with our own children as well! Without letting our children struggle through some of life's problems, they may not be prepared to meet the challenges of life later on.

The fact is that our schools are not equipping our children to learn about financial responsibility (although some say they do). According to Consumer Reports, the ironic reality for many school districts is that there's no money for personal-finance material to teach our kids about money. So what happens? Banks, credit card companies, and investment companies provide materials that are rarely objective, and frequently give bad advice. One major credit card issuer provided kids with a workbook entitled, "How Deep Can They Go?", telling children it's reasonable to spend up to 20 percent of their net income (after paying rent or mortgage) on installment payments and credit-card bills, an inordinate amount of debt for anyone! Another company distributed a booklet, "Kids, Cash, Plastic and You," which only says to pay monthly installments on time, but without mentioning the best strategy of carrying no monthly balance at all.1

But the failings of our schools is no excuse for us, as parents. We have the God-given responsibility to disciple and parent our kids into becoming responsible Christian adults. If our children grow up with the "gimmes" and become selfish and materialistic, this will not escape the Lord's notice!

So how can you help your children prepare for life and financial responsibility? Here are some suggestions:

Lead By Example. We need to show, not just tell, our kids how to be compassionate, generous, and smart consumers and responsible good citizens. We need to find opportunities to talk with them about some of the financial decisions we make, and walk them through a few of the options and alternatives, so that our children learn these details on the road to embracing the broader concepts of self-discipline, sharing in a charitable spirit, and sound decision-making for themselves. Since their strongest temptations may come from commercials and advertisements, we need to talk about the sales approaches and decode the sometimes subtle messages they present.

Let Children Learn On Their Own. Kids who have a voice in how they save and spend their money make for informed and prudent consumers. Children need financial guidance from parents, but they also need the first-hand experience of deciding how to handle money for themselves. For young children, this may mean giving them an allowance and encouraging them to put money in the plate at church, or letting them pay for a store item and receiving the change. For older children and teenagers, it may be allowing them to make decisions about expensive clothes by struggling with the question, "Is this something I truly need, or just want, and how important is it to me?", or letting them handle returns and complaints regarding defective purchases they make.

Don't bail your children out if they've spent all their allowance and want or need something else. Let them learn by facing the logical consequences of their own decisions! One excellent lesson in financial management that your children will learn in this instance is that resources are limited. This also helps a parent eliminate getting hooked into a child's inevitable, "Mom, can you buy me..." questions on most every shopping trip. Now the response becomes, "Well, do you have the money to buy it? If not, maybe you'd like to save your allowance until you can." And it's difficult to think of a better learning experience than having a child wake up to mistakes in judgment after saving diligently and depriving themselves of other "luxuries" to buy that one especially expensive toy only to find that the purchase wasn't worth it after all.

Single mother Linda's son, Michael, almost learned the lesson of limited resources some years ago when he was 12-years-old. His mother warned him to save his weekly $5 allowance for the day his class went to the Dade County Youth Fair. Michael knew for a week the Fair was coming, but he spent his money anyway. Now came the learning experience of letting him go to the Fair flat broke, right? Wrong! Michael cleverly scored quite a tidy sum from his grandparents. (We discuss some of the problems of interference by in-laws in Chapter 11 of Making A NEW Vow.)

It also is so important not to miss those golden opportunities to teach our children about financial responsibility. Cheryl's brother, Larry Rybka, is a great example. One Christmas holiday, Larry was driving his seven-year-old daughter, Laura, to the mall to shop for presents. "Sweetheart, what are you going to buy Mommy?", Larry asked as he gazed at his daughter in the rear view mirror. "Well, I'm going to buy her a necklace, and some perfume, and some shoes, and a pocketbook and a...", the list went on and on! "Well, honey," Larry gently interjected, "how are you going to pay for all those nice things?" "Easy," Laura chirped, "I thought that I would do the picking, and you could do the paying!" Larry smiled to himself before pointing out, "Well, if I did pay for your gifts for Mommy, I really would be the one making the gifts—not you." After hearing this, Laura was very quiet for a time while staring out the car window. Finally she said, "You know, Daddy, I've been doing some more thinking about this. And I believe Mommy would much rather have a clay statue for Christmas...of me!" Oh well! But the point was made nevertheless!

Finally, since having money of their own allows kids to learn so many valuable life lessons, don't deprive them of this opportunity by taking away their allowance for misbehavior, such as fighting with siblings. There are plenty of other ways to discipline children through taking away privileges which adequately address the corrections needed.

Allowances. Few parents or stepparents would neglect or refuse to provide clothes, school meals and the basic necessities of life for all children in the blending family, even fees for participating in sports events. But the issue of allowances for each child in the family quite often is another "sticky issue." Should you give each child a regular allowance? If so, how much? What, if anything, should a child do to earn it? Will doing chores be a prerequisite to receiving an allowance, or will each child instead be paid for completing specific chores? In lieu of an allowance, will each child receive spending money for specific things, such as clothes or entertainment? What if a child has a regular job and already earns sufficient spending money? These matters need to be reviewed and agreed upon to avoid sibling wars in the blending family household.

Why are allowances important? Because each child needs to learn how to manage money. How can they do it without having any funds themselves? Allowances also are basic tools for helping our kids learn about family values, setting priorities in life, and being smart consumers. Allowances are best not tied to chores such as making the bed, taking out the garbage, folding the laundry, setting the table, or caring for a family pet. Why? Because doing chores is part of being a family and helping one another. If parents pay kids for chores, it can changes a kid's perspective. Instead of altruistically thinking about being a helpful family member, children may begin thinking selfishly about what's in it for them. Each family member has a personal stake and responsibility in helping family life run without being paid to do it.

Most child psychologists, money experts and parents are pro-allowance in theory, with no strings attached in terms of getting it, and spending it. Parents then provide the basic things in life such as food, shelter, education, medical care and basic clothing, with kids using their allowance if he or she wants anything beyond these basic necessities.

Other parents are concerned that such an approach may convey the message that you can get something for nothing, and that there is such as thing as a free lunch. They maintain that there should be a direct connection between work and pay. This springs, in part, from the Apostle Paul's admonition to adult Thessalonians: "If a man will not work, he shall not eat." (II Thess. 3:10) Consequently, since a child's "job" is doing well in school, some parents pay incentives for achieving good grades, for example, which encourages exemplary work while also giving kids hands-on experience with deferred gratification and budgeting between grading periods.

But most everyone agrees that parents need to be flexible and creative, and tailor ways to put money into a child's hands in a manner best suited for his or her unique personality and development.

Most experts also believe it is good to begin giving an allowance when a child is 6 to 8-years-old, and is able to understand money, count it, and make change. And give it in small denominations, four quarters instead of a dollar, since this may make more of an impression on the kids to save a portion rather than spend it all. Another good idea is to pass out allowances to the children on Sunday night so they won't head to the mall and feel the temptation to spend it right away.

How much allowance should you give to each child? A familiar rule of thumb is a dollar a week for every year of age, although this seems excessive to many parents. Other parents think children need enough so that they can squander it, but not so much that you'll be upset if they do. Zillions, the Consumer Reports magazine for children, annually polls its national readers on allowances since 1981. In 1998, of the approximate half of the 1,059 kids sampled who received an allowance at all, children 8 and 9 received $3.74/week; 10 and 11-year-olds averaged $5.19; kids 12 and 13 received $6.66; and 14-year-olds received $9.45. However, kids also received other money from parents and relatives in the form of gifts and payments for special work projects.

No matter what all the kids in your family receive, there are going to be some who will be unhappy. But this too is a good learning experience. One of the lessons is that money received is an allowance, not a shakedown of parents!

Above all, and especially in a blending family, make sure that the allowances are equitable depending on each child's age. Avoid making any discrepancies if kids are less than two years different in age.

In a letter to USAA Magazine a number of years ago, Dana Panter of Conroe, Texas outlined her sound philosophy regarding allowances for her kids:

"In our family, I pay allowances once a month as a means of teaching children how to manage money. The money is divided into five categories: tithing, gifts, clothes, savings and spending. The children do have weekly chores which are considered a part of being a member of our family. There are consequences (privileges taken away, etc.) if chores are not done. I believe it is wrong to tie allowance to chores in that children then tend to expect money for everything they do and don't learn a sense of `duty' in life."2

Parental Gifts From Ex-Spouses and Grandparents. It will happen sometime, your ex-spouse will lavish expensive gift(s) on your biological child, while your stepchildren look on enviously. Or your parents will take your biological child on a fabulous trip, but not even acknowledge their stepgrandchildren in your household on their birthdays. You may feel guilty, while your spouse becomes resentful at the disparity adversely affecting his biological children. Meanwhile an intense rivalry grows among the children in the blending family. The rivalry continues if grandparents of one child provides for a college education or a future inheritance, while the other children in the same home must scrap and save to get by hoping for scholarships or perhaps getting loans to attend college.

As difficult a problem as these situations present in a blending family, it may be a good thing for children to learn that everyone does not have equal advantages in life. Sure, you can ask those outside the family to be sensitive and empathetic to how all the children in your family react to selective gifts. You might even limit how a child uses a gift that other children in your family do not receive. But maybe all these circumstances will produce good fruit and help discipline and mature kids for how the real world can be at times.

Emphasize Fairness. It will be very difficult, if not impossible, to treat all children in the blending family equally in all situations. Why? Because they have so many different needs which are in an almost constant state of change. One child may have severe medical problems and need much more time and attention. Another child may be a gifted athlete and need more financial support for sports gear and league fees. There also may be a child "caught in the middle" in the blending family who just needs to be bucked up and encouraged more than the others. No, the time, money and attention each child receives may not be equal. But it is important that each child sees the remarried couple being fair in meeting legitimate family needs without bias or prejudice. If the kids see fairness, it will keep them from exercising their natural tendency to keep score of what each child receives.

Focus on the family, realizing that each blending family home is different, especially in financial blessings and use of those resources.

Disciple Your Children Into Having Giving and Grateful Hearts. This is the most important financial lesson to instill in children living in a blending family. Talk to them about the importance of giving generously to the church, and helping those in need. Help them to become "other-centered" as part of their love for God, and love for their parents and siblings. There are no greater commandments than fulfilling these goals in life--for your children, or yourselves. (Matt. 22:34-40)

[1] "Future Debtors of America," Consumer Reports, December, 1997, Page 16.

[2] Dana Panter, "From Parents' Perspectives," USAA Magazine, August/September, 1996, Page 14.

Joseph Warren Kniskern is a Christian attorney, mediator, and author of "When The Vow Breaks: A Survival and Recovery Guide For Christians Facing Divorce," and "Making A NEW Vow: A Christian Guide To Remarriage And Blending Families," both available from Broadman & Holman Publishers, Inc. in Nashville, Tennessee.