The Ruark Kids

Financial literacy


Siena has been receiving a small allowance for over a year now. Thanks to a Christmas present from Mo and G-Dad a few years back, Siena has a piggy bank divided into four chambers each with its own slot. We’ve designated the chambers as Spend, Save, Invest, and Charity. Siena has been getting six quarters each week (recently increased to seven when she turned six). She’s required to put one quarter in each slot, and then gets to choose where to put the remaining quarters.

At the end of last year, Mama presented Siena with a set of charities, and Siena got to choose which one to donate her charity money to. This let her decide which one sounded the best to her. I had some grand plans for dealing with interest in the Save chamber and market gains (or losses) in the Invest chamber at the end of the year, but I realized she’s still a little too young to internalize that properly.

Interestingly, the first year of doing this, she would almost always put one extra quarter into Charity, and the other extra one would be evenly distributed among the other three chambers. This didn’t surprise us, given her amazingly charitable nature. However, once we let her start to buy some things with her own money, she started putting the extra one into her Spend chamber more often. Even she cannot escape the grasping tendrils of commercialism.

Given how little she makes each week, she hasn’t been able to buy much with her money. She would collect her Spend money into a little doggie purse (also courtesy of Mo, I believe), and we would head out to Target to shop. When she saw something she wanted to get, I would tell her how many quarters something would cost. Depending on what it was, and based on some internal rules I have about how worthwhile an object is, or conversely how little I want it in the house, I would offer her a steeper or shallower discount. A book of paper dolls that cost $10, say, I would tell her would cost 4 quarters, whereas a baby doll that costs $10 I would tell her would cost her 40 quarters (she seriously does not need any more baby dolls in this house). Four quarters was still a month of her allowance if she hadn’t set aside any of the extra quarters for Spend, so even a book was still a significant purchase. Over time, I reduced the discount I offered her, so things gradually got more expensive.

This was, naturally, all before she learned how to read the price tags.

When she hit 6, she hit the jackpot. This was like lottery big for her. She had previously been dealing in quarters, usually having seven to ten dollars total on hand at a time. After her birthday, and when the counting was done, she had over forty dollars in new money. So what did we do? Target, of course!

She quickly spent half of her money on Lego Friends kits. She also bought Thalia a little present so she would have something, too (Siena is still such a considerate girl). I managed to convince her not to spend it all at once, although I did leave her that option. She also has decided to use her own money (without asking or informing us) to buy ice cream at school, $1 on Fridays. Nonetheless, when we went to Target last weekend, she was up to around thirty-five on hand, so she bought another Lego Friends item (the recently released horse trailer) at $25. I haven’t been discounting these purchases at all, now.

Unfortunately, she has yet to run out of money, or experience the problem of really wanting something and not having the money for it. So we haven’t had to dip into Savings yet, or plan to grow her money to a certain point. But we aren’t far from that, I think. The plan is eventually to have her understanding the difference between Spend, Save, and Invest. I’ll provide a constant rate of return on Save, no return on Spend, and base the return on Invest on how the markets do for the year (multiplied generously in the positive direction by some factor to actually provide a decent return if the markets are positive that year).

The other event I was excited about for her happened this past weekend. The girls and I went to a local orchard for cider donuts. Unfortunately, they were not making them at the time. I offered them a choice in snack, either a visit to the bakery counter for cookies or to the ice cream counter for a cup of ice cream. As you might expect, Siena chose one and Thalia chose the other. We got in line for ice cream, Siena’s choice, first, but the line was long. So I handed Siena three dollars and told her to make sure she orders the kid size and pay with that money. Thalia and I walked off to the bakery counter, where we couldn’t see Siena at all. (As an aside, this is not just a big step for Siena, but for me as well to leave her unattended, unseen, surrounded by strangers, for five minutes!) After Thalia and I waited and purchased our bakery items (butter cookies for her, some mini-cannolis for me, and a miniature chocolate truffle cake for Mama), we went back over to the ice cream counter to find Siena at the front of the line with correct change in her hands and receiving her cup of ice cream. As we snacked outside in the fantastic New England fall weather, she told me she had been shy about ordering. But she realized she had to make the order or she wouldn’t be getting any ice cream.

This was her first purchase without any assistance. I was so proud of her!



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