How to rack my kid's money?

[David Carlson]

On 10/1/2012 6:39 AM, Ian K wrote:
> I also use Liability Accounts for my children's money.
> They have their own bank accounts and cash, but I give then a monthly
> allowance, and that goes into the Liability Account. E.g.:
> Expenses:Kids:Allowance > Liabilities:Kids' Accounts:X's Account
>
> I use scheduled transactions to automate the process. One very useful reason
> for doing it this way is there are often occasions when I need to spend
> money 'on their behalf' like buying something online for them with a credit
> card.
>
> If necessary, I can then pay them 'real' money, so that transaction would go
> for example:
> Assets:Cash > Liabilities:Kids' Accounts:X's Account
>
> So when the Kids' Allowance Expense transaction happens I incur an expense
> (and my net worth changes), but then when I transfer the money to them, or
> buy something on their behalf that doesn't affect my bottom line.
>
>
>
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Remembering my own childhood, and now seeing my young grandchildren, I
would suggest that when they are very young it would be better to use
real cash and some sort of piggy bank.  As they become able to grasp the
concept of receiving and spending an allowance, I would stay with hard
cash until they are old enough to complain when they need to learn about
working to earn the allowance.  I would not switch away from cash until
sometime after they are 'earning' their allowance.

When in the hard cash mode I would make it a point to have the cash in
hand to keep my parental responsibility to my children.

David C
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