20. The Use of Money
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The use of money, 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. Then, in the second place—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 servile pestering—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 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 pestering 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; or to practice self-denial today, for the sake of a greater good tomorrow. 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 pestering! It is this 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 forethought 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 base 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 beggar, by crude pestering 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 cannot be denied, however, that the tendency of the above 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 maneuvering or by asking for it directly, with more or less of urgency or pestering 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, whose resources are 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 allowance, as here recommended, does not prevent the making of otherpresents of money, or of anything 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 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—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 cannot expect that her children will learn regularity, punctuality and system in the management of their monetary 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 cannot understand at all the written record made of their financial 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 financial 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 saved, 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 anything 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 cannot learn to walk by always being carried, so they cannot 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 cannot 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 cannot 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 financial 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 financial obligation. It is not necessary that he should do anything base 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 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.
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 financial 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 lack, on their part, of all sense of delicacy and of obligation, or of responsibility of any kind towards their parents in respect to their financial 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!" 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, pesty 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.
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