Impacts on spending decisions

It would be a mistake for me to have you thinking that introducing a living allowance to our teenager has gone smooth AF, because it hasn’t. Like I mention in our about page, life is an endless experiment, and we tweak and tune the parameters of the allowance as challenges crop up, and there have been some challenges. But, we have seen glimmers of the kind of thinking we wanted this big change to inspire.

Just like large-scale change in the organisation where you might work, a change to the system requires a change to the way we think as we adapt to the new system, and that can cause bad moods. The Kübler-Ross Change Curve shows you the range of emotions and behaviours that our new allowance structure has influenced.

We all travel this rollercoaster, not just the kid, so be prepared for your own frustration, denial, and depression. Also be aware of micro-leaps all across this curve within a single day or week. Don’t forget that this curve represents the progression of human adult emotions in response to change. We’re living with teenagers in this scenario, so it’s all over the map.

Here are some of the impact moments I’ve observed:

Self-directed price comparison and cost-saving decisions

One of the early positives was when Mr14 (he just had a birthday) wanted to go to the movies with friends the next day. Instead of just agreeing to meet everyone at the Hoyts, he researched and found the same movie at a cheaper price from a nearby arthouse cinema, saving himself about $5 and using that savings to buy the requisite movie junk from the supermarket downstairs, rather than from the more expensive candy bar.

Checking in to avoid a potential impulse buy

The day before the movies, Mr14 was hanging out in the city with friends and texted me to ask if he could spend all his allowance if he happened across sneakers that were on sale for the right price. I sent back a text reminding him that he had movie plans for the next day, and that the decision was ultimately his, but if he had no money left, he wouldn’t be able to go to the movies. He texted back “dw”. That means don’t worry.

Lamenting poor spending decisions

Mr14 sent me a text one day last week to say that he’d be home later and would be eating out in the city with a friend. I was obviously exasperated at the short notice and that I’d made plans to cook spaghetti and meatballs for dinner, but you pick your battles, right? He came home with a box of KFC and sat at the table with that while Mr10 and I were eating our home-cooked meal. Part way through, he said he would’ve preferred to have spaghetti and meatballs than to have spent $15 on KFC.

So, that’s the good stuff. What about the tough stuff?

I fell off the co-CFO wagon

Mr14 had a few days left of school holidays after being away for a week and he was enjoying playing online games with his mates. His mates decided they wanted to play a CS: GO tournament (or something) and he had to pay to join (or something). It would be USD$25. He wanted an advance. I acquiesced, due to decision-fatigue from the school holidays, but took $34 from him straight out of his next allowance. That was the $25, plus conversion, plus 10% interest. Matt and I have since discussed clarification to the loan clause in the contract to say “no payday loans”. When you’ve got clear-cut boundaries, decision-fatigue will have less influence.

Reverting to past behaviours

Mr14 called me yesterday afternoon from the shops. He asked me to transfer $2 to his Spriggy card. I asked why. He didn’t have enough to buy the can of whipped cream that he planned to squirt directly into his mouth. I said, “no, I’m not an ATM”, and hung up. He came home with a block of chocolate, no cream, and no money left on his card.

As you can see, we’re not even through the second month of this and we’re all over the map.

Share your #wins and #fails in the comments. It’s all good. x

Too young to be a kitchen hand? Ideas for extra income

Matt, with his entrepreneurial mindset, has often encouraged the kids to come up with ways to generate their own cash, but without the significant stimulus that this new allowance scheme might provide, our suggestions either haven’t been taken up or have withered fairly quickly. In the few days before we sat down to talk about the new allowance we got a flier in the mail look for new walkers for letterbox distribution. I know, right?! It’s like Inception. And the timing! It was as though the screenwriter for our lives was looking for a way to foreshadow what was about to come. So, why don’t we start with that:

1. Letterbox distribution

When we mentioned the opportunity to Mr13, he was keen, even without us provoking fake enthusiasm. Our flier supplier drops off a box of 1000 leaflets and the typical job takes 3-4 hours to complete. It depends on fitness and density of housing around where you live. If your leaflet people know what they’re doing, they’ll make sure you’re assigned a delivery area that you actually live in. In our case, the base rate is $40 for 1000 fliers per 1000 houses. If we get an extra piece or two per house, the rate can go up to $50. So, you’re looking at roughly $10/hour, but you can get exercise, some fresh air, and you can listen to your tunes while you’re out and about. Our leaflet guy has a few kids doing leaflet drops, often with parents accompanying.

Mr13 has done this gig once across three shifts of 1-1.5 hours each, and Matt went along for the first shift. He left the “no junk mail” letterboxes alone, and found a couple of sets of apartments with accessible letterboxes, allowing him to knock off up to 350 in one complex. The metric you want is letterboxes per step. If that’s high, you’re winning. We’ll call for another box-load in a week or so, because Mr13 went away on holidays, just after he finished his flier run.

 2. Busking

Mr13 can play a bunch of musical instruments, guitar being one of them. He’s done a couple of busking sessions, at our urging, and wasn’t too enamoured with it. He said it was boring. We made the mistake of setting him up in a quiet end of the street, when it would have been best to throw him in the deep-end, further down, where more of the foot traffic is. More money may have meant more enthusiasm. Nonetheless, in 1.5 hours on a Sunday morning, he made $15. To go into the busier areas, you may need a permit, but it’s only about $10 in our council area. It’s well worth it, if you live close enough to those busking hotspots.

3. Selling herbs and stuff

If you’re lucky enough to live where your back or front gate are on a thoroughfare, your kids could hit the jackpot just by selling herbs from the garden. We have friends who’ve done exactly that. Their kids have funded entire LEGO sets with the money they made from selling herbs, and even their own paintings, at their back gate on market days. People walk by to go to the markets and can’t not buy a bunch of rosemary from a little kid. These same kids have now upgraded to busking inside the markets.

4. Food delivery

Believe it or not, Deliveroo don’t have a minimum age requirement for the food delivery workers. As long as you can get your teenager an ABN and insurance, they’re good to go. They’ll need some stamina to ride their bicycle around with the insulated backpack, and they’ll need the confidence of riding around the neighbourhood, but if your teen has those attributes, then they might like this option. Until the drones take over, I reckon this will be a common first job for older teens and young adults.

5. Become a YouTuber

OK, so this is something my kids have both wanted to be. I’ve given them plenty of encouragement and guidance about how to stand out in a crowded marketplace, but they’re consumers, not producers. So far. As fanciful as it sounds though, it can certainly be a source of substantial income, just like this kid I saw on telly the other night. Her YouTube channel has become so successful her dad quit his day job to be her full time movie editor and social media assistant. This is a long game, though, so be prepared to put the work and the research in, and probably, the hardware investment.

I’d be glad to add more first jobs to this list. If your kids have some experience and recommendations, let us know in the comments.

Check the rules in your state about minimum ages and restrictions. If you’re in Australia, start here.

Inspiring good saving habits

When we introduced our new allowance idea to Mr13, I talked about ways you can keep clothing costs down by shopping second-hand at Savers or using sites like Catch of the Day or Kogan to buy brand name sneakers and what-not much cheaper than retail. Using Mr13’s Google docs, Matt magicked up this spreadsheet right before our eyes, so that we could demonstrate the impact spending decisions can make across the year, especially when you have a savings goal in mind.

Sample budget spreadsheet
Sample budget spreadsheet

You can click the image for a bigger version, but to describe the elements: the variables in the top left corner are where your kid can plug in their allowance and any supplementary income. The calculation for the per month allowance is the weekly $amount x 52 weeks / 12 months. Matt provided a place to calculate a loan should we agree to pony up some cash for something Mr13 really wants but can’t afford on his own. This is a 10% interest formula, but that can be easily changed. In this sample, I’ve left the repayments out of the Expenses. There’s no loan in place, but we may have occasion in a future post to go into this some more. At the bottom, of course, is the cumulative savings across the year and this changes automatically with each variable you adjust and each expense that goes out.

After demonstrating how budget forecasting works and playing with some scenarios, Mr13 seemed to get a bit more interested in the possibilities and the process. It was fleeting, though—he is a teenager—but it was good to see him get truly engaged with the mechanics. Download your Teenage Budget template here.

As well as talking through this budget, I read one of the stories out loud from the Barefoot Investor* book I gave Mr13 for Christmas. I wanted to show him how smart thinking can turn a disastrous financial situation around. We suggested he read a chapter a day, but as we so often say, “we can’t force you to do it”. He still hasn’t read it.

Post your questions about the template in the comments below, or let us know how budget forecasts have been inspiring your teenager.

*This affiliate link will take you to Booktopia

Setting an allowance

At the start of this year we switched Mr13 from a small amount of weekly pocket money to an allowance with spending responsibilities.

We wanted Mr13 to understand the value of money, but we didn’t know how to do that, so like every modern parent, Matt had a moan on Facebook about teenagers and their spending habits. Julia, a friend and parent of older teens, told us her method, which has produced grown-up kids making smart financial management decisions. Essentially, you pay a much higher weekly allowance and the kid has to spend it on clothes, shoes, haircuts, entertainment, computer games, public transport, you name it. This way, they come to understand how budgeting works and might even appreciate how much they’ve been costing us.

But how much do you pay?

I did a bit of googling and found a website that listed out all the typical expenses a teen has and the amount came to $85 a week. After some discussion and thinking about the variations we would make to the listed budget, Matt and I came to $50 a week as a place to start. So, we sat down with Mr13 and told him of our new plan to restructure the pocket money deal. I’d been hinting at it through December, so he was already prepared for something to change. But, rather than announce the figure, Matt asked Mr13 to list out the things his allowance would cover and work out what that might come to over a month or a year.

What expenses does the new allowance cover?

  • Non-household food inc. school canteen, takeaways etc
  • Clothing
  • Underwear
  • Shoes
  • Entertainment
  • Computer games
  • Discretionary laptop equipment
  • Gifts
  • Haircuts
  • Sporting consumables eg skate stuff
  • $40 per month towards mobile phone & data expenses (in line with the cheapest phone plans on offer) 

When he went through this list, we landed on an amount pretty close to $75. Julia’s model included a portion set aside for saving, but we haven’t introduced that yet.

We asked Mr13 how much he thought a weekly allowance should be, given the amount we’d arrived at. He said $50! I said, “well, here’s your first lesson: negotiation! I would have started at $100.” Nonetheless, we agreed together that the starting point would be $50 and we would see how it goes. He was ok with that, probably because he didn’t know what he was walking into. Also, one of the benefits I pitched was that he had total control over what clothes he bought. No more Kmart short-shorts from Mum.

To make it official, I drew up a contract listing everything we would cover and everything the allowance would have to cover. The contract lives on our notice board, next to the fridge, alongside the list of permitted recyclables.

Contract of Allowance

How did he take it?

It’s kind of hard to tell. Like his mother, he doesn’t reveal much of what he’s really thinking. However, he seemed open to it and was willing to give it a shot.


Are you working with similar model? Leave a note in the comments. I’ll be back next time with a budget spreadsheet Matt came up with so Mr13 could do some financial modelling and forecasting (on the spot! He loves that sort of thing).

Introducing an allowance

A couple of years ago we started giving both our kids (Mr10 and Mr13: not their real names) a $5 per week allowance. I hadn’t introduced pocket money in exchange for chores before, because I felt that chores were just something we all did and we don’t get paid for them when we move out of home, so why make that association in the first place. But eventually, I needed some sort of currency (see what I did there?) to bribe them with when they started to whine too much. They literally only had one job back then—Mr13 had to unstack the dishwasher and Mr10 had to empty the bins—and we decided paying them $5 a week was fair enough.

Mr13 wearing dish gloves
Mr13 at 3 years old, back when he thought washing the dishes was fun.

Neither of them spent much back then, so the $5 would just accrue each week in my mental balance sheet and every now and then they would ask to spend some of that or cash it out for something a bit bigger than junk food from the local grocery store. As you can imagine, that became unsustainable and the handwritten tally on a piece of paper was often neglected. We needed a better way to keep track of their spending and try to encourage some saving.

Working in tech and around startups every day, Matt met the founders of Spriggy and he felt it was a great way to get the kids on board with creating some savings goals as well as giving us an easy way to monitor how much allowance each kid had available to spend.

Spriggy comes with an app and a pre-paid Visa credit card. For the parents, the app allows us to pre-load an account that services a Parent Wallet and the kids’ spending money. We can see the savings goal, adjust pocket money, track spending, and lock the card if we need to. For the kids, they each get the independence of using their allowance wherever a credit card can be used, they can see how their savings are going in their app, and they can get used to making decisions about saving versus spending.

When we introduced Spriggy to the kids last year, we bumped up their weekly allowance to $10 and insisted they save half. As a 10 year old with no social life, Mr10 found it very easy to save his money. He even decided against buying a Wallace & Gromit souvenir when he checked the price, saying, “eh, it’s not worth it”. He topped out at about $165 dollars or so, before spending money on a few Steam and Xbox games. We can see Spriggy works for him.

At 13, though, Mr13 was burning through that cash like the card was on fire in his pocket and then coming to me for more. So, we’re trying something different and I’ll get into that in a coming post.

We do not have a commercial arrangement with Spriggy, except as customers, but if you sign up with this affiliate link, your account will come pre-loaded with $5 and our account will be topped up with $5, too.