In a recent interview with People magazine, Senator Obama lists “allowance” as one of their families seven “Obama House Rules.” Both daughters receive allowance the traditional way, money for chores, and dad acts as the bank. Due to his intense travel schedule, he admits to not paying on time — but the girls keep track and remind him about what he owes them.

It did my heart good to see, with all the topics this story could cover, there was space to talk about allowance. Clearly, allowance is an important discussion in every family — no matter who they are. Paying on time is a struggle most parents have had to deal with.

But, make no mistake, kids are taking note of the delay.

My advice — make it your business to pay allowance on time. Allowance is a money promise. If you break money promises to your kids, they may think it’s okay for them to break money promises to others as well. And that could translate to credit problems later in life.

Susan Beacham
Written by Susan Beacham
Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

    2 Comments

  1. Ainoa July 13, 2012 at 7:46 pm Reply

    This is a great topic. I truly believe ficnanial literacy is the most undertaught subject in this country.Other books I would highly recommend are The Millionaire Next Door and The Millionaire Mind, both by Thomas Stanley (the former with William Danko). These are excellent studies on the millionaire population, especially the latter.Several myths are exploded by these books. #1 is that the three careers which have the least likelihood of making you a millionaire–that is, producing a net worth of over $1 million by retirement–are the three status careers, doctor, lawyer, professor.Most of the millionaires in this country actually live in small towns. Over 80% built their wealth in one generation. They own their own businesses, live in houses that cost less than $200,000, drive used cars, and for entertainment go to high school football games on Friday nights. Their defining characteristic is frugality.It’s an age-old formula: minimize expenses, maximize savings, invest in income-producing properties. Live below your means, and make your money work for you.Interestingly, many millionaires did not attend college. And those that did didn’t have high SAT scores or earn a high GPA. What they learned in college was social skills, how to read and get along with people. Which certainly explains the old saying, the A students go to work for the C students.The Millionaire Mind addresses this subject specifically. The problem with the education system and standardized testing is that it focuses too much on analytical thinking and not enough on creative thinking. The former is required for certain professions, but the latter is required for entrepreneurship.The ability to recognize a business opportunity and the courage to pursue it are what distinguish the self-employed from the employed. Most people go to school and make good grades so they can get a job and earn a comfortable salary. They are risk avoiders. Others go to school and make average grades, but they view criticism (from teachers and counselors) as motivation to prove themselves. They are risk takers.It isn’t easy going to work for yourself. It takes discipline, courage and faith. But the ficnanial rewards greatly exceed those from going to work for someone else.College is not for everyone, only those who intend to pursue a professional career. Most people, especially young men, would be better served by attending trade school and earning a license–a mechanic’s, a plumber’s, an electrician’s, an a/c repairman’s, a realtor’s license–then going to work for themselves. It’s far cheaper, takes less time, and most importantly you can enter the workforce much sooner and start making money.In real estate, there are three rules: location, location, location. In business success, there are also three rules: vocation, vocation, vocation. Choosing the right career–doing something you love to do–is the single most important factor in determining success.But sadly that is not the focus of our current education system, directing students toward careers that most suit their individual talents and abilities. Rather, K-12 schools and colleges have degenerated into indoctrination factories that push a liberal, multi-cultural, socialist agenda.The sooner the American people, especially parents, recognize that and demand educational reform from the ground up, the better off this country will be.

  2. Millionaire society November 3, 2012 at 4:53 am Reply

    Greetings! Very useful advіce in this pаrticulаг агticlе!
    It’s the little changes that produce the greatest changes. Many thanks for sharing!

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