Bank of Dad

My brother-in-law, Kevin, coined this term: "Bank of Dad."

I heard his family using this phrase, and so I decided to get nosey -- and I'm glad I did! I questioned him about all of the gritty details -- and I've learned a lot -- not just from his generous descriptions, but then from my attempts at implementation for my own family.

So, are you interested? Wanna get started on your own financial journey with the amazing Bank of Dad?

Read my experiences, then start your own -- and remember, YOU are in charge! If the rules I've created aren't going to fit your family's dynamics, please feel empowered to tweak! (Yes, that was TWEAK, not Twerk!)

BANK of DAD

Each child over a certain age has an account. A five-subject notebook where all transactions are recorded quite simply, with a column for the date, a column for the transaction, a column for the the specific amount, and a column with the running total. Mom and Dad can have accounts too, but in our family, it's a kid thing. Plus, there isn't a notebook sold with enough subjects for all of us!

The child *earns* deposits into the account... NO hand-outs! My brother Richard calls it "commission" rather than allowance (he might have gotten that from Dave Ramsey -- he's a big fan!) We keep track of four ways the children can earn money each day (remember the CLAP system?!). After five days, they have up to 20 points (they get weekends off). Based on their age, each point is worth a certain amount and they get paid for the amount of work that they actually accomplished! Our "formula" is three cents per year of age per point.

The child is encouraged to give part of their deposit to a charity (we call it tithing and give it to our church), as well as another portion which they give to their older selves (aka savings). We follow the 10-20-70 % rule -- they give ten percent as tithing, twenty percent as savings, and then have 70% to spend or save as they see fit.

When the child wants to buy something, he or she has to see if they have enough money in their Bank of Dad account. THIS IS SO NICE as the Mom... I don't have to decide whether or not to buy things for them! If they have enough money, they decide (and sometimes they decide NO). If they don't have enough money, then that lack of money is the deciding factor. Mom is no longer the bad guy who says no all the time! In fact, I can show love and sympathy when they don't have enough money! Heck, I've been there before.

Simple enough, right?

Well, there are ways to make it more complex... if that's what you're looking for. Like, you can pay interest on their long-term savings. Or, you can put them in charge of buying a whole lot more stuff than just the petty bubblegum at the grocery store types of things. Or you can offer to make extra deposits into their long-term savings for when they reach a certain goal (like Eagle Scout or straight "A"s). Remember that book I reviewed, The Entitlement Trap -- it has several great ideas for this Family Economy.

Generally speaking, though, it really is a simple system. I love it! I love my kids. I love their Dad... and not just because he makes a good Bank!