Before starting allowances in your home for your kids, take time for money conversations with your parenting partner. Knowing more about each other’s money history will help you agree on how you will facilitate your allowance system together. Your ultimate goal is to prepare your kids to grow up to be independent financially as adults so you won’t feel pressured to support them after they leave home. 

Topics for money conversations

• What were your childhood experiences with money growing up?
• Do you understand your spending and payment system?
• What are your financial goals?
• Did you get an allowance as a kid?

Trust me, I know you can make mistakes with money and still raise money-smart kids. You can start a new family tradition of handling money the right way. ~ Dave Ramsey

Consistency is the key to success with any parenting activity. In our no-cash allowance system, the one absolute rule we agreed on was that we would never “pay” our kids with cash. As parents, we know that kids work the system to get what they want. If Mom says no, they’ll try Dad. But when you agree that all money is transferred as a number, your kids will learn that they have to manage their money as a number.

Believe it or not, after being my wife’s best friend for over 15 years, there were some things I didn’t know about her when it came to money, mostly regarding how she was raised by her parents and their attitudes towards it. And vise versa. We ended up having a 2-hour conversation about our childhood, finances, expectations and dreams for our family and daughter. This chapter alone, based on the ground my wife and I covered during that conversation, is worth 100X what I paid for this book. Amazon review

Guide your kids toward financial independence

As parents, we may say, yes, of course, we want our grown children to be financially independent, but surveys show a different result. Supporting grown children can risk the parents’ financial future, including their ability to save for themselves. As a result, parents are more likely to report being stressed out about their retirement. 

According to a CNBC survey, half of parents with a child over 18 provide financial support, from buying food, paying for cell phone plan, or covering health and auto insurance, contributing $1,000 a month, on average. 

Preparing your kids for their financial future is good for your family now and in the future. That’s been the result for my family with my grown children and my grandchildren. Financial independence is a great legacy to pass on to future generations.

My success with money management carried with me when I moved away from home. In fact, I didn’t even realize that this was anything out of the ordinary until I got married. My husband and I had many different ideas about money–and I realized that my experience with money management was something I could add to our relationship. My husband is amazed that I enjoy managing our money. To me it’s like fitting together the pieces of a puzzle. Abby, daughter who had 15 years of no-cash allowance experience

Allowance anecdotes

Didn’t ask for money: When talking with other parents of college kids commiserating about those phone calls asking for money, we realized our kids never called home from college to ask for money. That’s when we knew our no-cash allowance was a success and I wrote my book to share our experience with other parents.

Five dollars: When my youngest was a college senior, I slipped a $5 bill in her hand as she going back to school. She looked at me and said, “What are you doing? You never gave me cash.”  Yup, I was consistent for years and then broke my own rule—once.

When your kids track all their money as a number, they become better money managers.

Read more Why parents avoid the money talk with their kids

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Next week: Kids learn to manage cashless spending with The No-Cash Allowance