I was going to title this post something like, “My Daughter, The One Percenter.” I know each of us thinks our own child is special, but it never hurts to get some extra validation. Independent data that proves it beyond a doubt. A brief story from CNN talking about kid’s allowance and savings was interesting to me –
First, Jane2.0’s allowance happens to be the $15 average. We started giving her the number of dollars to match her age, at about 7 or 8. Now, at 14, I round up, so $15 it is. It’s the 1% that surprised me a bit. In the age of gadgets and electronics, a week’s allowance isn’t enough to buy much, and I’d have imagined more kids would be savers. When J2 wanted a MacBook laptop for her birthday, we said that $1000 was more than we were planning to spend on a 12 year old’s birthday present. We agreed to pay for half, and she would take the other half from her savings. We felt this served as a good lesson, the benefit of saving her allowance and money she started to earn babysitting, and it would also prompt her to be more responsible with the laptop.
Enough bragging, she’s off to a good start, understanding the value of money and learning that the cost of a purchase can be converted to the number of hours of babysitting or week’s worth of allowance to buy the item. How about the 99%? All of the kids who are getting an allowance but spend it as fast as it comes in? It seems this snippet of a story may be the preface to the longer tale of the low saving rate in the US, and why at the back end so many have failed to prepare for retirement.