Educating My Daughter On Negotiation And Finance

My wife and I got a text from our daughter the other day that said

"Yo peeps. I need more money!"

In further texts, composed in a similarly elegant style, she explained that she wanted to start buying some clothes and other items. She wasn’t just asking for a handout. She was looking for more work to do to earn money.

In fairness, it was probably time to revisit this subject. We haven’t changed her allowance in years. That being said, she doesn’t buy a lot of stuff, either, so there hasn’t been much of a need to adjust things. But, she’s now 14 and will be entering high school in two months. I remember  when I was in high school, I spent a lot of money on records and tapes. (I'm dating myself here. CDs started getting popular right as I was entering high school, but the players were still pretty expensive. I didn’t buy my first CD until I was in college.) I went out to restaurants with friends and hung out at arcades. Basically, entering high school brought many changes to my life, most of which involved spending money.

So my wife and I sat down with our daughter to hash out the details. We purposely let her lead the discussion, curious to see what she would ask for and would she would offer in return. She was willing to take on extra chores and also was looking for additional one-time jobs she could do to earn some additional cash. But this is where things got a little.. surreal.

In an attempt to teach some negotiation skills beyond “yo, I need more money,” we asked her how much more she wanted, expecting her to ask for some crazy increase. Instead, she asked for less than my wife and I had decided to give her! This was not the direction I expected the conversation to go, so instead of agreeing to the lower figure, we added a couple more chores to the list and offered the figure we had in mind (which again, was more than she asked for). She was OK with the additional work, but actually wanted less money. Yikes. At this point, I looked at her and said “Don’t turn down someone offering more than you asked for, especially for the same amount of work. That’s just stupid!”

It was surprisingly difficult, but we did finally get her to accept the larger amount. It turns out, she was worried about the effect she would have on the household budget. She often hears me and my wife talking about the various different budgets we have for running the household and she was worried her raise would upset that. So cute…

Then came the next hurdle.

We've always split her allowance into two parts – money she can spend and money she has to save. When discussing her new allowance, we were willing to say her increase could be entirely used for spending and she didn’t have to save any of it. Surprisingly, she balked.

She said she didn’t feel right spending all that new money. “Mission accomplished!” I thought to myself. After some further discussion, she ended up saving the same percentage of her raise as she was for her current allowance – 30%.

So all in all, I feel this was something of a mixed bag. On the one hand, she tried to turn down extra money, but on the other, she made sure to keep saving a big chunk of the increase. I think the saving lesson is the more important one and I’m glad that she had the response she did. As for turning down more money, well, I obviously still have some more teaching to do there!