A $$$ Tale of Two Boys And A Super Mom

History suggests that wealth doesn’t last three generations.

As I’ve mentioned on previous posts, and in the article I wrote for the Globe and Mail, there’s usually a generation that builds wealth, a generation that maintains it and a generation that flushes it down the toilet.

Financial success is like physical, athletic ability.  NOBODY (regardless of their genetics) can win a marathon without facing physical discomfort; nobody can win a tennis tournament without swinging the racket thousands of times.

 But if I had a dollar for every time I heard a parent say that they’re going to “help” their kids financially because they don’t want them to struggle, I’d have enough money to buy weekly drink rounds for everyone at the local pub.  Newsflash:  training for a marathon is a struggle; training for a rugby tournament is a struggle; training for financial independence is a struggle.   Not struggling promotes weakness, no matter what the discipline.

Gifting money to a child (or worse, an adult child) is like getting your kid a wild card entry into an elite tennis tournament.  If they haven’t worked their butts off, they’re going to get hammered.

In tennis, that hammering is pretty obvious.  You miss nearly every shot, the crowd yells “mismatch” and you take the walk of shame into the locker room. 

In the world of money, it’s different.  Credit cards and high-paying jobs allow many people to bluff their success– for a while.  But eventually, the generation that doesn’t earn its fiscal muscles pays dearly for the atrophy.

Wealth doesn’t commonly last three generations.

A Tale of Two Boys And A Super Mom

My sister (a single mom) is raising two boys on a school teacher’s salary in Victoria, British Columbia.   Like preparing athletes for competition, Sally is teaching her kids to metaphorically hit backhands, forehands, read the court, and hit killer serves.  Adam and Tyler (aged 9 and 6) are building their financial muscles without even realizing it.

Lesson 1:  Children shouldn’t always equate household chores with money

Sally started their training three years ago by assigning household chores when Adam and Tyler were 6 and 4 years old respectively.  And she gave them $2 per week for their allowance.  It didn’t take long before the boys came to their own conclusion:

Chores = Allowance

But Sally squashed that idea when Adam (her eldest) said, “Mom I don’t want to do chores today, so I won’t take my allowance this week.”

Sally, not wanting to turn her kids into a couple of mercenaries, said that the chores were their household duties; they could voluntarily relinquish their allowance, but they would still have to do their chores.

Doing these jobs every week didn’t appeal to the boys as much as bouncing on their trampoline outside, but they’re learning to value their work.

Six year old Tyler’s favorite chore is vacuuming the couch.  As he bragged after finishing the job today:

“That’s the most dog hair that anyone has gotten off a couch.”

 I doubt that.  But if he sees himself as a super canine hair eradicator, that’s a good thing.

Lesson 2:  Responsibly saved money can help others in need

Tyler and Adam don’t spend all of their allowance.  They’re learning to delay their gratification, and more importantly, they’re figuring out that they aren’t the center of the universe.  Recently awarded a raise (to $3 a week) they allocate 25 cents per week towards a charity of their choice.  Nine year old Adam recently donated $10 to the Canadian Cancer Foundation, “So people can get cured from cancer,” he says.

The boys have been allocating a percentage of their allowance towards charities since they were just 4 and 6 years old.  But according to Sally, Tyler (aged 6) knows as much about molecular biology as he knows about money.

If you ask Tyler how much money he has, he can’t tell you.  As Sally says, “He gets confused about how much he has ‘in savings/investments’ and how much he has ‘in spending money’.  As you’ll see below, Sally split their money into categories.

Lesson 3: Delayed Gratification Can Be Taught

My sister doesn’t spoil her kids with toys, so when they want something, they have to save for it.  Here’s how their weekly $3 allowance gets divided:

  1. Two dollars towards savings/investing
  2. Seventy five cents towards spending money
  3. Twenty five cents towards charities

But Sally has some concerns about how she initially laid out the rules:

 “I want to be really careful about this whole delayed gratification thing.  They should probably have access to some of their ‘invested savings’ over time, so they can learn to enjoy the benefits of saving large, regular amounts.”

 Currently, Adam is coveting on an ipod touch on  e-Bay.  He knows the retail value, and he has decided not to pay more than $150 for it.  He has $80 in his “spending money” account, but Sally is prepared to give him $70 from his “savings/investment” account, to cover the difference.

Bottom line: it’s his money.  He earned it.

Adam knows that the purchase might not work out.  If the bids go higher than $150, he’s out of the running.  And that’s a great lesson for a nine year old kid: learning self – control and delayed gratification.

Little Extras

Realizing the benefits of earning money, and delaying gratification, Adam has asked his mom if he can increase his weekly income with some extra chores around the house.  “Poo Patrol” for their Golden Retriever is one of his regulars.

Six year old Tyler also wanted to get in on the action – but he was fired.  As Adam says, “When Ty does Poo Patrol, he goes outside, shuts the door, explores for a while, and then comes back and says, ‘Mom, I’ve finished Poo Patrol!’”

Little Ty is learning a great lesson.  When the quality of his work improves, he’ll earn the special privilege of picking up dog poo.

College Savings

In my opinion, one of the worst things a parent can do is pay 100% of their child’s college education.  Sally isn’t going to do that.  Her boys are going to start saving for their college expenses soon.  She’ll help out when they need it, but Adam and Ty are developing some big financial muscles; as a result, they won’t have umbilical cords connected to Sally’s purse.

These kids are going onto the tennis court swinging.  They’ll earn their rightful places in the tournaments of life and money. 

And in November, when I arrive in Canada, Sally and I are going to open an investment account (in trust) for Adam….with his own money, not with Sally’s.

What do you think of Sally’s methods? And do you have any useful tips for parents?

For more information on how children can become financial powerhouses, check out my book, Millionaire Teacher.



Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School and Millionaire Expat: How To Build Wealth Living Overseas. My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions.

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19 Responses

  1. squasher55 says:

    Hey Andrew,

    A great article about your sister and her two boys. I was in Victoria, B. C. for a week a while ago…..a gorgeous place, but also a very expensive place.

    Your sister is doing a great job with her boys…clearly with some help and advice from a good uncle. Those tasks remind of my own youth growing up in Toronto. The subdivision of their money is excellent, and the thought of young boys thinking about giving to charities is awesome.

    However…not many parents can pull that off today, and not many are smart enough to actually do it. A big Congrats to Sally.

    • Hey Squasher,

      Thanks for the comment. It sounds like you have similar memories. And if so, I'll bet that's one of the reasons your financially OK today. Am I right?

      You're right about Sally. She has done an amazing job!

      • squasher55 says:

        Hey Andrew,

        You are correct about that re my youth. But I went for a lot of years when I was young and even older thinking that frugal was the same as 'cheap'. I never really believed that, but it was a popular opinion. Thanks to people like you, frugal is now 'cool'…..as it should be. Many of my not-so -frugal friends and relatives are now struggling in their retirement.

        • I guess the impracticalities of living beyond one's means snuck up on people. You're right Squasher, frugality does appear to be the new "cool" in some circles.

          It's good that you got on board before your (now-struggling) retired friends did. I have friends, also, who blow money without differentiating between their wants and their needs. They have so little in savings, but they think they're doing fine. I can clearly see where my friends are headed.

          Any gentle words of advice that you think might help?

  2. Endurance says:

    I loved reading your blog about Sally and the kids and here’s why: mostly because there was resonance for me. My own parents were financially astute. They had to be as hard-working parents of three kids who came from an immigrant family and a coal miner’s family. We earned our allowance and, like Sally’s kids, we couldn’t opt out on chores. In fact, chores were a given, they were sometimes done collaboratively (usually more fun), but almost always in a rotation so that we didn’t burn out (i.e., my days to set the table, clean the table, wash dishes were Mondays and Tuesdays, sister #1 had Wednesdays and Thursdays, and little sister #3 had Fridays and Saturdays [not prime days ‘cuz they were the weekend, but I guess it ended up lucky because those were also days we were off doing fun things so weren’t always around for dinner]). Anyhow, I understand what it means to earn an allowance and to set aside a percentage of that for Sunday school giving. I also learned that if I really wanted to buy the Beatles newest album, or purchase a transistor radio, or save enough money for a concert ticket, it meant I accepted even crappy babysitting jobs. 35 cents an hour in those days and 50 cents after midnight . . . I loved it when Moms and Dads stayed out late!!

    So, I attribute some of my financial stability now to my parents’ wisdom and to my good fortune that they couldn’t afford to send three daughters to college. We had to step up ourselves (with some help from grandma and scholarships and part time jobs). Your personalized blog sparked these memories and reminded me of the financial education I learned from my hard-working parents who never caved to our whining about “Everybody else gets a bigger allowance than we do” or “I need a new bicycle.” We grew up on hand-me-downs (from clothes to bicycles to cars), we recycled before it had a name (I remember ironing the wrapping paper after Christmas to use it the next year), and my sisters and I will all live without major financial stress when we retire . . . Thanks to my folks.

    Now, thanks to you for your common sense wisdom – may it serve others as my folks did for my sisters and me. Not everyone is as lucky as I was to learn those lessons from a young age. Not too late to exercise that financial muscle – even tho’ it’s sometimes painful.

    Kudos to you for your book, your blog, and this extended teaching gig!

    • Thanks for the great story Endurance!

      I find this line particularly interesting:

      "So, I attribute some of my financial stability now to my parents’ wisdom and to my good fortune that they couldn’t afford to send three daughters to college"

      A few years ago, my dad said that if he could have helped with my college expenses, he would have. But it makes me wonder: if he did help me financially, would I have less money today, as a result.

      I guess I'll never know.

  3. Drizzt says:

    those are really great lessons for kids. I am sure we should spread this around.

  4. squasher55 says:

    Older Canadians are very lucky, as pensions in Canada are much better and reliable….than in many other countries…like the USA where I now live. But I actually receive 4 pensions…all from Canada.

    And even though I have been retired for a while, I have really discovered that saving and investing is so much easier now with the internet being available. So my words of wisdom are simple…..start saving and investing early, but if you didn't (for whatever reasons) start now. It is never too late to get ahead financially.

    • Great advice Squasher!

      I have some good friends, in their 50s, who have given up. For some background…. sales of my book were amazing at the school I teach at (Singapore American School). Ten days after I first took the book up to school, I had sold more than 400 copies to teachers. The school is huge (I think we have about 300+ teachers) so many of the teachers bought more than one book. Now back to that couple that has given up:

      They're good friends of mine. And at a party on Friday night, they said, "We're not going to buy your book Andrew."

      "That's OK," I laughed, "You don't have to"

      But then they let out the reason: "We're so far behind that we don't even want to look at a personal finance book. We've given up."

      I wonder how many other people feel so helpless about their finances.

      Unlike you, Squasher, they won't have any pensions coming their way. They have been internationally teaching for their entire careers, and I'll admit, they've been living "the good life" longer than they should have.

      But they're awesome people: smart, and practical on every other front.

  5. Glad to see another family separating chores and allowance. It's very much in line with what I am doing at home with my kids. Chores are chores. It's a family duty. I find many parents have difficulty giving an allowance without strings attached. I always think of "Brewster's Millions" (that may show my age slightly 🙂 )

    I haven't had to setup a saving versus a spending ratio since it all goes in their bank account. I also haven't quite figured out the raise pattern. My kids are 2 years apart and the youngest isn't happy with a lower pay 🙂

    • Hey Passive!

      That makes me laugh: "the raise pattern."

      I guess you could establish a meritocracy. That would actually be pretty funny!

      It sounds like you're doing an awesome job with your kids!

  6. proud friend says:

    What a great story Andrew! I am fortunate to know Sally and her wonderful boys! I raised two sons and although I thought I taught them the value of earning and spending a dollar, I didn't give them the skills and perspectives that Sally has given her boys. My sons are now young adults. They are financially managing but I expect that Adam and Tyler will not only manage their financial futures but also plan them. Sally is an amazing mother! Adam and Tyler love their Uncle Andrew and are looking forward to his upcoming visit. I teach kindergarten along side Sally and would love to have you share some financial tips with my students. I can't wait to buy an autographed copy of your book! as well!

    • Hey Proud Friend!

      I think you and Sally would be better at sharing financial tips with Kindergarten kids than I would. Perhaps I could talk to the teachers! My Kindergarten special is paper airplanes, goofy faces and an uncanny ability I have to get properly behaving children are riled up! You might not want me anywhere near your Kindergarten class!

      I look forward to meeting you in November.

  7. Great post.

    Your sister is doing an awesome job with the kids.

    Financial lessons learned early, can last a lifetime, providing a lifetime of good habits including minimal financial mistakes.

    I'm not surprised your sister is doing such a great job with the boys; seems that good financial management runs in the family 😉



  8. Thanks for sharing this great story Andrew. It seems good financial sense runs in your family. I wonder how much you and Sally learned about personal finance from your parents. Did they have a similar approach, or have you guys tweaked it a little?

    • Hey Balance Junkie:

      I think my parents provided their kids (there are four of us) with the things in life that truly matter most: love, time, support etc.

      But they didn't have money, so this necessitated that we develop reasonable financial skills if we wanted something material, beyond what we actually "needed". Like many kids, we had paper routes from a really young age, then part-time jobs. I can't recall ever being given money to buy candy or any kind of toy. At Christmas, yeah, we received gifts. But beyond Christmas and birthdays, if we wanted something, we had to save money for it.

      I still remember my brother and I buying our first fishing rods. They were cheap. But the feeling of buying our own rods was so empowering that I still remember it.

      If they had disposable money, I honestly don't know what they would have done. Today, if they were to go back in time, with more money, knowing what they know today, I think they would do everything the same way. They wouldn't give us money, even if they had it. But when they were in their early 30s, raising 4 young kids, it's tough to say what they would have done then, if they had the financial means.

      Perhaps they would have spoiled us. And if they had, my sister probably wouldn't be raising her boys the way she is.

      Thanks for the comment Kim!

  9. Julie says:

    Hi Andrew, I love this article about kids and money! We are doing things very similarly with our kids. I would really like to know more about how to open an investment account “in trust” with my children’s own money here in Canada.

    They both have quite a bit in their savings account at the bank, but it would be great to see it grow faster, since they have a lot of time before they will need it.

    Is this something I can ask about at my bank? Or how do I go about doing this?

    • Hi Julie,

      Yes, you could ask your bank to help you open a brokerage account in trust. If they won’t let you, you could open an account in trust with TD bank and purchase their investor series of index funds. Once you have done so, you could convert them to the lower-cost e-Series funds.


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