THE USE OF MONEY.
The money question in the management and training of children has a
distinct bearing on the subjects of some of the preceding chapters. It is
extremely important, first, in respect to opportunities which are afforded
in connection with the use of money for cultivating and developing the
qualities of sound judgment and of practical wisdom; and then, in the
second place, the true course to be pursued with them in respect to money
forms a special point to be considered in its bearing upon the subject of
the proper mode of dealing with their wishes and requests.
_Evil Results of a very Common Method_.
If a parent wishes to eradicate from the mind of his boy all feelings of
delicacy and manly pride, to train him to the habit of obtaining what he
wants by importunity or servility, and to prevent his having any means of
acquiring any practical knowledge of the right use of money, any principles
of economy, or any of that forethought and thrift so essential to sure
prosperity in future life, the best way to accomplish these ends would seem
to be to have no system in supplying him with money in his boyish days, but
to give it to him only when he asks for it, and in quantities determined
only by the frequency and importunity of his calls.
Of course under such a system the boy has no inducement to take care of
his money, to form any plans of expenditure, to make any calculations, to
practise self-denial to-day for the sake of a greater good to-morrow. The
source of supply from which he draws money, fitful and uncertain as it may
be in what it yields to him, he considers unlimited; and as the amount
which he can draw from it does not depend at all upon his frugality, his
foresight, or upon any incipient financial skill that he may exercise, but
solely upon his adroitness in coaxing, or his persistence in importunity,
it is the group of bad qualities, and not the good, which such management
tends to foster. The effect of such a system is, in other words, not to
encourage the development and growth of those qualities on which thrift and
forehandedness in the management of his affairs in future life, and, in
consequence, his success and prosperity, depend; but, on the contrary, to
cherish the growth of all the mean and ignoble propensities of human nature
by accustoming him, so far as relates to this subject, to gain his ends by
the arts of a sycophant, or by rude pertinacity.
Not that this system always produces these results. It may be, and perhaps
generally is, greatly modified by other influences acting upon the mind of
the child at the same time, as well as by the natural tendencies of the
boy's character, and by the character and general influence upon him of his
father and mother in other respects. It can not be denied, however, that
the above is the tendency of a system which makes a boy's income of
spending-money a matter of mere chance, on which no calculations can be
founded, except so far as he can increase it by adroit manoeuvring or by
asking for it directly, with more or less of urgency or persistence, as the
case may require; that is to say, by precisely those means which are the
most ignoble and most generally despised by honorably-minded men as means
for the attainment of any human end.
Now one of the most important parts of the education of both girls and
boys, whether they are to inherit riches, or to enjoy a moderate income
from the fruits of their own industry, or to spend their lives in extreme
poverty, is to teach them the proper management and use of money. And this
may be very effectually done by giving them a fixed and definite income to
manage, and then throwing upon them the responsibility of the management of
it, with such a degree of guidance, encouragement, and aid as a parent can
easily render.
_Objection to the Plan of a regular Allowance_.
There are no parents among those who will be likely to read this book of
resources so limited that they will not, from time to time, allow their
children _some_ amount of spending-money in a year. All that is necessary,
therefore, is to appropriate to them this amount and pay it to them, or
credit them with it, in a business-like and regular manner. It is true that
by this system the children will soon begin to regard their monthly or
weekly allowance as their due; and the parent will lose the pleasure, if
it is any pleasure to him or her, of having the money which they give
them regarded in each case as a present, and received with a sense of
obligation. This is sometimes considered an objection to this plan. "When
I furnish my children with money," says the parent, "as a gratification, I
wish to have the pleasure of _giving_ it to them. Whereas, on this proposed
plan of paying it to them regularly at stated intervals, they will come
to consider each payment as simply the payment of a debt. I wish them to
consider it as a gratuity on my part, so that it may awaken gratitude and
renew their love for me."
There is some seeming force in this objection, though it is true that the
adoption of the plan of a systematic appropriation, as here recommended,
does not prevent the making of presents of money, or of any thing else, to
the children, whenever either parent desires to do so. Still the plan will
not generally be adopted, except by parents in whose minds the laying of
permanent foundations for their children's welfare and happiness through
life, by training them from their earliest years to habits of forecast and
thrift, and the exercise of judgment and skill in the management of money,
is entirely paramount to any petty sentimental gratification to themselves,
while the children are young.
_Two Methods_.
In case the parent--it may be either the father or the mother--decides to
adopt the plan of appropriating systematically and regularly a certain
sum to be at the disposal of the child, there are two modes by which the
business may be transacted--one by paying over the money itself in the
amounts and at the stated periods determined upon, and the other by opening
an account with the child, and giving him credit from time to time for the
amount due, charging on the other side the amounts which he draws.
1. _Paying the money_. This is the simplest plan. If it is adopted, the
money must be ready and be paid at the appointed time with the utmost
exactitude and certainty. Having made the arrangement with a child that he
is to have a certain sum--six cents, twelve cents, twenty-five cents, or
more, as the case may be--every Saturday night, the mother--if it is the
mother who has charge of the execution of the plan--must consider it a
sacred debt, and must be _always_ ready. She can not expect that her
children will learn regularity, punctuality, and system in the management
of their money affairs, if she sets them the example of laxity and
forgetfulness in fulfilling her engagements, and offering excuses for
non-payment when the time comes, instead of having the money ready when it
is due. The money, when paid, should not, in general, be carried by the
children about the person, but they should be provided with a purse or
other safe receptacle, which, however, should be entirely in their custody,
and so exposed to all the accidents to which any carelessness in the
custody would expose it. The mother must remember that the very object of
the plan is to have the children learn by experience to take care of money
themselves, and that she defeats that object by virtually relieving them
of this care. It should, therefore, be paid to them with the greatest
punctuality, especially at the first introduction of the system, and with
the distinct understanding that the charge and care of keeping it devolves
entirely upon them from the time of its passing into their hands.
2. _Opening an account_. The second plan, and one that will prove much the
most satisfactory in its working--though many mothers will shrink from it
on the ground that it would make them a great deal of trouble--is to keep
an account. For this purpose a small book should be made, with as many
leaves as there are children, so that for each account there can be two
pages. The book should be ruled for accounts, and the name of each child
should be entered at the head of the two pages appropriated to his account.
Then, from time to time, the amount of his allowance that has fallen due
should be entered on the credit side, and any payment made to him on the
other.
The plan of keeping an account in this way obviates the necessity of paying
money at stated times, for the account will show at any time how much is
due.
There are some advantages in each of these modes. Much depends on the age
of the children, and still more upon the facilities which the father or
mother have at hand for making entries in writing. To a man of business,
accustomed to accounts, who could have a book made small enough to go into
his wallet, or to a mother who is systematic in her habits, and has in her
work-table or her secretary facilities for writing at any time, the plan
of opening an account will be found much the best. It will afford an
opportunity of giving the children a great deal of useful knowledge in
respect to account-keeping--or, rather, by habituating them from an early
age to the management of their affairs in this systematic manner, will
train them from the beginning to habits of system and exactness. A very
perceptible effect in this direction will be produced on the minds of
children, even while they have not yet learned to read, and so can not
understand at all the written record made of their pecuniary transactions.
They will, at any rate, understand that a written record is made; they will
take a certain pride and pleasure in it, and impressions will be produced
which may have an effect upon their habits of accuracy and system in their
pecuniary transactions through all future life.
_Interest on Balances_.
One great advantage of the plan of having an account over that of paying
cash at stated times is, that it affords an opportunity for the father or
mother to allow interest for any balances left from time to time in their
hands, so as to initiate the children into a knowledge of the nature and
the advantages of productive investments, and familiarize them with the
idea that money reserved has within it a principle of increase. The
interest allowed should be altogether greater than the regular rate, so as
to make the advantage of it in the case of such small sums appreciable
to the children--but not too great. Some judgment and discretion must be
exercised on this as on all other points connected with the system.
The arrangements for the keeping of an account being made, and the account
opened, there is, of course, no necessity, as in the case of payments made
simply in cash, that the business should be transacted at stated times. At
any time when convenient, the entry may be made of the amount which has
become due since the time of the last entry. And when, from time to time,
the child wishes for money, the parent will look at his account and see if
there is a balance to his credit. If there is, the child will be entitled
to receive whatever he desires up to the amount of the balance. Once in a
month, or at any other times when convenient, the account can be settled,
and the balance, with the accrued interest, carried to a new account.
All this, instead of being a trouble, will only be a source of interest and
pleasure to the parent, as well as to the children themselves, and, without
occupying any sensible portion of time, will be the means of gradually
communicating a great deal of very useful instruction.
_Employment of the Money_.
It will have a great effect in "training up children in the way in which
they should go," in respect to the employment of money, if a rule is made
for them that a certain portion, one-quarter or one-half, for example, of
all the money which comes into their possession, both from their regular
allowance and from gratuities, is to be laid aside as a permanent
investment, and an account at some Savings Bank be opened, or some other
formal mode of placing it be adopted--the bank-book or other documentary
evidence of the amount so laid up to be deposited among the child's
treasures.
In respect to the other portion of the money--namely, that which is to be
employed by the children themselves as spending-money, the disbursement
of it should be left _entirely at their discretion_, subject only to the
restriction that they are not to buy any thing that will be injurious or
dangerous to themselves, or a means of disturbance or annoyance to others.
The mother may give them any information or any counsel in regard to the
employment of their money, provided she does not do it in the form of
expressing any _wish_, on her part, in regard to it. For the very object
of the whole plan is to bring out into action, and thus to develop and
strengthen, the judgment and discretion of the child; and just as children
can not learn to walk by always being carried, so they can not learn to be
good managers without having the responsibility of actual management, on a
scale adapted to their years, thrown really upon them. If a boy wishes
to buy a bow and arrow, it may in some cases be right not to give him
permission to do it, on account of the danger accompanying the use of such
a plaything. But if he wishes to buy a kite which the mother is satisfied
is too large for him to manage, or if she thinks there are so many trees
about the house that he can not prevent its getting entangled in them, she
must not object to it on that account. She can explain these dangers to the
boy, if he is inclined to listen, but not in a way to show that she herself
wishes him not to buy the kite. "Those are the difficulties which you may
meet with," she may say, "but you may buy the kite if you think best."
Then when he meets with the difficulties, when he finds that he can not
manage the kite, or that he loses it among the trees, she must not triumph
over him, and say, "I told you how it would be. You would not take my
advice, and now you see how it is." On the contrary, she must help him, and
try to alleviate his disappointment, saying, "Never mind. It is a loss,
certainly. But you did what you thought was best at the time, and we all
meet with losses sometimes, even when we have done what we thought was
best. You will make a great many other mistakes, probably, hereafter
in spending money, and meet with losses; and this one will give you an
opportunity of learning to bear them like a man."
_The most implicit Faith to be kept with Children in Money Transactions_.
I will not say that a father, if he is a man of business, ought to be as
jealous of his credit with his children as he is of his credit at the bank;
but I think, if he takes a right view of the subject, he will be extremely
sensitive in respect to both. If he is a man of high and honorable
sentiments, and especially if he looks forward to future years when his
children shall have arrived at maturity, or shall be approaching towards
it, and sees how important and how delicate the pecuniary relations between
himself and them may be at that time, he will feel the importance of
beginning by establishing, at the very commencement, not only by means of
precept, but by example, a habit of precise, systematic, and scrupulous
exactitude in the fulfillment of every pecuniary obligation. It is not
necessary that he should do any thing mean or small in his dealings with
them in order to accomplish this end. He may be as liberal and as generous
with them in many ways as he pleases, but he must keep his accounts with
them correctly. He must always, without any demurring or any excuse, be
ready to fulfill his engagements, and teach them to fulfill theirs.
_Possible Range of Transactions between Parents and Children_.
The parent, after having initiated his children into the regular
transaction of business by his mode of managing their allowance-fund, may
very advantageously extend the benefits of the system by engaging with them
from time to time in other affairs, to be regulated in a business-like and
systematic manner. For example, if one of his boys has been reserving a
portion of his spending-money as a watch-fund, and has already half enough
for the purchase, the father may offer to lend him the balance and take a
mortgage of the watch, to stand until the boy shall have taken it up out of
future savings; and he can make out a mortgage-deed expressing in a few and
simple words the fact that the watch is pledged to him as security for the
sum advanced, and is not to become the absolute property of the boy till
the money for which it is pledged is paid. In the course of years, a great
number of transactions in this way may take place between the father or
mother and their boy, each of which will not only be a source of interest
and enjoyment to both parties, but will afford the best possible means of
imparting, not only to the child directly interested in them, but to the
other children, a practical knowledge of financial transactions, and of
forming in them the habit of conducting all their affairs in a systematic
and business-like manner.
The number and variety of such transactions in which the modes of doing
business among men may be imitated with children, greatly to their
enjoyment and interest, is endless. I could cite an instance when what was
called a bank was in operation for many years among a certain number of
children, with excellent effect. One was appointed president, another
cashier, another paying-teller. There was a ledger under the charge of the
cashier, with a list of stockholders, and the number of shares held by
each, which was in proportion to the respective ages of the children. The
bank building was a little toy secretary, something in the form of a safe,
into which there mysteriously appeared, from time to time, small sums of
money; the stockholders being as ignorant of the source from which the
profits of the bank were derived as most stockholders probably are in the
case of larger and more serious institutions. Once in six months, or at
other periods, the money was counted, a dividend was declared, and the
stockholders were paid in a regular and business-like manner.
The effect of such methods as these is not only to make the years of
childhood pass more pleasantly, but also to prepare them to enter, when
the time comes, upon the serious business of life with some considerable
portion of that practical wisdom in the management of money which is often,
when it is deferred to a later period, acquired only by bitter experience
and through much suffering.
Indeed, any parent who appreciates and fully enters into the views
presented in this chapter will find, in ordinary cases, that his children
make so much progress in business capacity that he can extend the system so
as to embrace subjects of real and serious importance before the children
arrive at maturity. A boy, for instance, who has been trained in this way
will be found competent, by the time that he is ten or twelve years old,
to take the contract for furnishing himself with caps, or boots and shoes,
and, a few years later, with all his clothing, at a specified annual sum.
The sum fixed upon in the case of caps, for example, should be intermediate
between that which the caps of a boy of ordinary heedlessness would cost,
and that which would be sufficient with special care, so that both the
father and the son could make money, as it were, by the transaction. Of
course, to manage such a system successfully, so that it could afterwards
be extended to other classes of expenses, requires tact, skill, system,
patience, and steadiness on the part of the father or mother who should
attempt it; but when the parent possesses these qualities, the time and
attention that would be required would be as nothing compared with the
trouble, the vexation, the endless dissatisfaction on both sides, that
attend upon the ordinary methods of supplying children's wants--to say
nothing of the incalculable benefit to the boy himself of such a training,
as a part of his preparation for future life.
_Evil Results to be feared_.
Nor is it merely upon the children themselves, and that after they enter
upon the responsibilities of active life, that the evils resulting from
their having had no practical training in youth in respect to pecuniary
responsibilities and obligations, that evil consequences will fall. The
great cities are full of wealthy men whose lives are rendered miserable by
the recklessness in respect to money which is displayed by their sons and
daughters as they advance towards maturity, and by the utter want, on their
part, of all sense of delicacy, and of obligation or of responsibility of
any kind towards their parents in respect to their pecuniary transactions.
Of course this must, in a vast number of cases, be the result when the boy
is brought up from infancy with the idea that the only limit to his supply
of money is his ingenuity in devising modes of putting a pressure upon
his father. Fifteen or twenty years spent in managing his affairs on this
principle must, of course, produce the fruit naturally to be expected from
such seed.
_The great Difficulty_.
It would seem, perhaps, at first view, from what has been said in this
chapter, that it would be a very simple and easy thing to train up children
thus to correct ideas and habits in respect to the use of money; and
it would be so--for the principles involved seem to be very plain and
simple--were it not that the _qualities which it requires in the parent_
are just those which are most rare. Deliberateness in forming the plan,
calmness and quietness in proposing it, inflexible but mild and gentle
firmness in carrying it out, perfect honesty in allowing the children to
exercise the power and responsibility promised them, and an indulgent
spirit in relation to the faults and errors into which they fall in the
exercise of it--these and other such qualities are not very easily found.
To make an arrangement with a child that he is to receive a certain sum
every Saturday, and then after two or three weeks to forget it, and when
the boy comes to call for it, to say, petulantly, "Oh, don't come to bother
me about that now--I am busy; and besides, I have not got the money now;"
or, when a boy has spent all his allowance on the first two or three days
of the week, and comes to beg importunately for more, to say, "It was very
wrong in you to spend all your money at once, and I have a great mind not
to give you any more. I will, however, do it just this time, but I shall
not again, you may depend;" or, to borrow money in some sudden emergency
out of the fund which a child has accumulated for a special purpose, and
then to forget or neglect to repay it--to manage loosely and capriciously
in any such ways as these will be sure to make the attempt a total failure;
that is to say, such management will be sure to be a failure in respect to
teaching the boy to act on right principles in the management of money, and
training him to habits of exactness and faithfulness in the fulfillment of
his obligations. But in making him a thoughtless, wasteful, teasing, and
selfish boy while he remains a boy, and fixing him, when he comes to
manhood, in the class of those who are utterly untrustworthy, faithless in
the performance of their promises, and wholly unscrupulous in respect to
the means by which they obtain money, it may very probably turn out to be a
splendid success.