• 4 Pocket Allowance

The Finite Resource Reality

Updated: Aug 4, 2019

Before our allowance system, I’m surprised our kids didn’t have a tape recording asking us to buy them things, to save them the effort. They asked constantly! “Can you buy me this?” was like a mantra every time we went out.

Money, like time, is a finite resource - how will you use them?

No matter how much we explained that we didn’t have money to buy everything they wanted – they just saw us swiping a plastic card (or, more recently, tapping). The notion that there was not an infinite amount of money was a foreign concept. Just swipe and go…what was the problem?

Our allowance system helped for kids to understand that underlying each of those swipes, there is an actual exchange of money. And that there are limitations on the amount of money we can access.

And the understanding of finite resources is important for kids as they start to get older. We use their understanding of money to explain how time is also a finite resource. There are so many hours in a day and so many days in a year. We need to use time productively. That’s not to say that every waking hour needs to be spent “working”. It’s OK to have some “mindless” time, so long as it’s our decision to use it that way. I use examples from my own life – I’ll curl up and watch a movie with the family. But I try to limit my time on social media, as I can easily spend hours scrolling through posts, and then wonder why I hadn’t gotten anything done that day.

We’ve also talked to our kids about how companies are fighting for both our money, but also for our time. A great way to drive this point home, is to look at their apps with them, and how that app is trying to convince them to spend their time on that app. Are there streaks that encourage daily engagement? Do you earn bucks the more you play towards in game purchases?

It’s important for me that our kids understand that when it comes to both time and money, they have choices on how they spend both.

The Finite resource reality, Ideas for parents about allowances and teaching kids about money and financial literacy, #4PocketAllowance

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