I came up with a plan today for how we’ll teach Holden about money.

Like many kids, he is going to get an allowance. But Papa is going to play banker along the way. Here are the details, the twist that I bring:

1. Once Holden has gotten acquainted with adding and subtracting, he’s eligible for an allowance.  (It’s only fait that he keep his own books, right?)  The allowance comes with the usual strings attached:  a few light chores such as keeping his room clean, etc.  (Taking out heavy bags of trash comes later.)
2. The allowance is nothing crazy or over the top — let’s say $5 per week.  Because a kid’s attention span is likely to be so short, I doubt that doing a monthly pay-out makes much sense; besides when he’s so young it doubles as a way of teaching him about days of the week (“Friday is pay day!”).
3. The twist on pay day goes like this:  “getting paid” is basically Monopoly Money.  We’ll keep a spreadsheet with to track his “account balance”.  Papa (as both boss and banker) has read/write access; young Holden will have read-only access to ease his mind a bit and to keep me honest.  “Pay day” comes, we do an inventory of completed chores, and put $5 into the plus column for the week; if Holden wants cash, he’s going to have to make a withdrawal from the First National Bank of Papa’s Spreadsheet.

Not too shabby of a plan, eh?  Maybe not totally original but I think there’s some merit to it.  But as Holden hits additional milestones, we can up the ante…

• Multiplication and division?  Got some knowledge of percentages under your belt?  Perhaps we can introduce the concept of an interest-bearing account.  And/or maybe special rates for money set aside as “savings”?
• Ready to take on some more chores and more responsibilities?  Time to learn about salary/wage negotiation.  (If ever there are siblings, perhaps it becomes a matter of “collective bargaining“?)
• And when it’s time to learn about things being really unfair, we can start having the ATM service charge come out of Holden’s end of the cash withdrawal, too…?