Lazy Man and Money

Kids’ Camp Conundrum

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(I love alliteration.)

You may have noticed that my posting schedule has slowed down recently. Some of it is due to vacations. We’ve had two in the last two months. Some of it is due to the vast number of dogs we are sitting lately. However, this week it’s something new, a grueling summer camp schedule. (Me, my wife, and a kid all have colds too, but I wanted to focus more on the summer camp.)

Warning: This is a rant. I understand it may be off-putting to complain about child care when so many people have had little or none for over a year now. I ask that you read it through and think about the overall value. Then I think you’ll be able to see the conundrum.

Here’s what my day with the kids’ summer camp looks like:

8:15 – Leave the house to bring Kid 1 to camp by 8:30
8:42 – Return home to pick up Kid 2
8:47 – Leave with Kid 2 to bring him to the SAME CAMP
9:15 – Return home to start the day

During this time, I’m feeding dogs we are boarding, shopping, doing laundry, cooking, dishes, some light cleaning, clearing out emails, and miscellaneous stuff like a dog doctor appointment and a dentist appointment. I guess you’d say that typical errands you might do. Then:

1:15 – Leave to pick up Kid 1
1:45 – Return home
1:45-2:30 – Free time (45 minutes)
2:30 – Leave to pick up Kid 2.
3:00 – Arrive home with Kid 2.

It’s two hours of driving to accommodate the camp’s staggered drop-offs. They are doing that for COVID, but we are talking about kids, outside, wearing masks, in a highly vaccinated state (RI)… and in this case in the same family. I’m all for COVID precautions, but even the most stringent CDC guidelines would be against that.

That 9:15 to 1:15 block is four hours of productive kid-free time. We pay extra for “full-day” care or those end times would be even sooner (12:30 and 1 PM).

We had no way of knowing the full schedule of things when we signed up. The logistics of the staggered drop-offs were a surprise to us until before camp (too late for refunds). The camp offered us the ability to drop the kids off at 9:00 and pick them up at 1:30, but that’s still the same 4 hours of productive kid-free time. That “solution” saves driving, but it also means less camp for each kid or wasting the money we paid to extend the day for the second kid.

The price of the summer camp for the two kids (combined) is around $750 a week. That’s roughly $3,375 a month as the average month is 4.5 weeks. Or if you want to put in yearly terms, that $750 a week is $39,000 a year (750 * 52). That’s after-tax money, so it can be seen as requiring around a 50k salary for these 4 hours of productivity (or 4.5 hours of the time they would be in care – it would be unfair for me to hold the driving time against them if it was a standard drop-off).

So I think I’ve set the scene accurately with this camp… except for one thing… these are specialty camps within a camp.

One of them is a Snapology franchise, which is a robotics class using Lego WeDo. They build the Lego bricks and code how they work in small teams of 3 people. I’m a little jealous that I couldn’t be a part to be honest. My 8-year-old loves it! Every day he has a billion things to say about how great it is.

My 7-year-old is doing and art specialty. It’s not a fancy franchise, but it is the one that runs longer in the day time and is a little cheaper. The art camp seems to cover several different classical techniques from Monet to Van Gogh to Jackson Pollack. I’m not sure my 7-year-old is going to become an art history major based on this one-week class, but exposure to all these types of art is great for him. The only downside is that he caught our bug and missed a day – $75 down the tubes I guess. He isn’t as enthusiastic about loving it as his brother, but that’s not really his personality. He made it clear it was awesome.

I think you get the point, this camp is very inconvenient (for me), expensive, but the kids love it. There are other camps like this in the area. It’s a picture of privilege as you might in Newport, Rhode Island. We have the Tennis Hall of Fame and they have a camp. It runs for about 3 hours and it’s expensive. It wasn’t running this year due to COVID, so I can’t compare the numbers. Sailing goes for only 2.5 hours, but is only $170 for the week. We tried to get in that, but maybe it’s for the best we didn’t make the deadline. It’s a longer drive (30 minutes each way), so I’d be tempted to stay there and try to work off a mobile hot spot.

If I haven’t already lost you, none of this is where I wanted or expected us to be. All the above camps are a lot different than what I had growing up. I think my mother said she sent me to camp for about $25 a week. I built zero robots, but it was fine. Fine in the sense that it built character. The swimming lessons were at 9AM and the pool was ice cold. You could opt-out, but that meant missing free swim when it was 3 PM and a day in the sun has worn you out. They had arts and crafts and sports, which were (again) fine. We went on long hikes which were not fun, except for the destination, which was usually a great view or a dinosaur rock.

The Traditonal Camp

The equivalent to that near us is the local YMCA. They offer around 3-4 different types of camps with prices around $225 a week (give or take $20 depending on the camp). They have a gymnastics camp, a ninja camp (which seems to be boys gymnastics), sports, traditional, etc. For both kids combined it would be $450 a week or possibly a little less as members get a discount. (We found that membership in the past was worth it just for the camp discount.) The hours are 8 AM to 5 PM (but camp starts at 9 AM and ends at 4 PM). With this camp, I can get close to 8 hours of work in. There’s no staggered drop-offs that make our current camp difficult.

To put the math in perspective, here are the costs of the two camps per hour.

Current/Specialty: $750 for 45 hours (4.5 day * 5 days * 2 kids) = $16.66 per kid hour
YMCA: $450 for 75 hours (7.5 day * 5 days * 2 kids) = $6 per kid hour

It seems like our current camp costs more than 2.5x more than the YMCA camp. Building robots and specialty art is expensive.

This is a financial blog, so I have to crunch those numbers. What’s more difficult is to quantify the kids’ enjoyment of the camp. There is no excitement about the day at YMCA camp. It’s often a coin flip between fine and bad. They both complain that YMCA yells at them. The “swim” is more of a slip-and-slide than a pool. The quality of camp seems objectively very, very different.

Middle Ground?

I’m not sure if a middle ground exists. I’ve researched camps extensively a couple of years ago, but COVID closed everything but YMCA last year. (YMCA had no COVID cases all summer.) My research was mostly focused on what the kids were interested in. I eliminated the tennis camp very early because 3 hours was ridiculously too little. I was interested in the sailing camp, but they were too young at the time, so it was easy to dismiss.

So that’s the conundrum. I could also keep the kids at home, which comes at costs zero dollars. There is an opportunity cost though. With the kids at home, I don’t have much time to work. I know the kids wouldn’t mind this, but it’s also not the best thing for them.

Next spring I will look at camps more discerningly, but it might be a mix of all three: specialty, YMCA, and camp.

What do you think? Do you have kids and send them to camp? Is this conundrum (outside of the Newport stuff of sailing) something that you experience or is it just me?

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MoneyTime Review: Teach Your Kids Personal Finance

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Money Time Logo
MoneyTime – Personal Finance for Kids

MoneyTime is having a flash sale that ends in 2-3 days. It’s 25% off an annual account. I’m just reviewing how much we spent for summer camp on the kids. I think they would have got a lot more value if I kept them at home and we did this (and some other things). Since my wife and I are both still working from home, it wouldn’t have been too much more difficult. I’m bumping this article from May 3rd due to the sale.

I have two boys, one in the second grade and one in the first grade. My second grader is doing basic math with money at school, things like making change correctly. It’s certainly a good start, it is math disguised as adding and subtracting tens and twenty-fives. My kids learn more about personal finance when I take them shopping and show them how I compare unit pricing on a jar of spaghetti sauce. For the most part, I should be focusing on how to give your child an allowance.

Alas, two of my greatest interests in life are personal finance and my kids… it’s inevitable that I would try to combine the two. I can’t have them learning all their personal finance from Teen Titans Go!. So when I heard that MoneyTime was an online class for teaching kids personal finance, I did a little research and reached out to them to find out more. Every week, I get a dozen or more companies asking me to pitch their product or service. This was one of the few times that I’ve reached out to the company. (You may have noticed that I review very few services.)

MoneyTime Review: The Overview

MoneyTime is designed for kids between the ages of 10 to 14. From their FAQ:

“We’ve found after testing that children below 10 years old found the math to be a little too complex and those above 14 found the graphics of the game to be too childish. That’s why this age range is perfect for MoneyTime.”

My 8-year-old is in challenge math classes at school, so I figure it was worth a shot. All year, he’s been getting extra instruction in school about how to work with computers just in case they have to go to home-schooling. That proved very helpful in getting him going with the basics of navigating the application. They were right about the math though. Early on, there were some multiplication questions. Armed with his Multiplication Machine, he was ready to go. I was always nearby, but he only called on me a couple of times. If I wasn’t a personal finance blogger (and a Tiger Dad) curious to push the age limits, I would wait until age 10 for the kid to get the most out of the classes.

money Time Screen

The MoneyTime system is broken up into 8 major topics:

  • Topic 1: Earning, saving and interest
  • Topic 2: Employment
  • Topic 3: Managing your money
  • Topic 4: Borrowing money
  • Topic 5: Property
  • Topic 6: Investing
  • Topic 7: Business
  • Topic 8: Protecting your money

Each of those topics is broken up into 4-6 modules or lessons. For example, “Managing your money” has modules of Smart Spending, Budgeting, Banking, and Paying. I’m not sure that a 10-year-old needs to consider employment in topic 2, especially the “resume” module. However, I think it’s based on the outline of “earn, save, invest” in that order.

My son completed the first topic, so this review will be based only on that section. The lower right-hand part of the dashboard gives you a little view on how that went:

Money Time Kids

If you read from the bottom up, you can see my son got only 67% of the pre-test questions on earning, saving, and investing correct. I was very impressed by this pre-test because had little exposure to some of the topics. I had to remind him a couple of times that he wasn’t expected to know the answers. I used this opportunity to teach him how to eliminate some answers that seemed obviously wrong and then take his best guess of what’s left.

After a module of instruction, there is a 10 question quiz. He got 60%, 90%, and 80% respectively on the earn, save, invest sections. The invest section introduced the difference of compound interest vs. simple interest – a distinction he still talks about today. When it came to the final review test on the topic of save, earn, invest, he scored a 93%. I expected some improvement because he was actually learning the material on the test, but this was outstanding.

MoneyTime Review: The Motivation

You may have noticed that my son has an avatar of a weird orange bird superhero. He likes fire-type Pokemon and my theory is that this most closely resembled Blaziken – the fire chicken.

You can spend your earnings (which come from completing modules) on improving your avatar. This was important motivation for my 8-year-old. He also made investments in education (the stack of books) and investments (the treasure chest). The education helps him earn more as he completes more modules, he’ll earn more. This seems to be a little like the game of life where having a good career helps you earn more from the “Pay Day” spots on the board. His current job of “trainer” earns $1000 a year. His $5,500 savings is enough to upgrade to Carpenter that would give him a 50% raise per year ($1500).

It’s not clear to me how years pass in this world, but I think it’s because we stopped where we did. My son did one topic (the three modules) over two days during school break. He hasn’t gone back to it since then. I don’t think it is because MoneyTime didn’t have the staying power. Instead, my kids simply don’t have a lot of time with school/homework/karate/cub scouts/etc. I want them to have some unstructured time as well. I think it’s best for us to revisit it over the summer. He’ll have more free time and be almost 9 then.

MoneyTime Review: The Conclusion

I gave you our experience with MoneyTime, but I think the company’s professionally-made, less than 90-second, video shows off a little more from a different perspective. It’s worth the quick watch:

There are a couple of online courses for kids and personal finance, but this is the first one I’ve tried. It works very well. Then again, kids’ personal finance education is non-existent, so the bar is very, very low. When I think of what we spend on karate/skiing classes and specialty camps, the value of this education is way, way, off the charts.

This link will give you 25% off bringing your annual membership to $49. That price is current as of this writing (5/3/2021). They have a deal going on now, and that this code stacks with that. I think the pricing used to be $99 a year (without this link and without the deal). If you think it’s something that you might be interested in, I would buy it now. In the interest of full disclosure, I should mention that the company will give me a commission on sales. I will also note that my son also earned some money for his Kid Roth IRA by helping to be a willing test subject for this review. If you decide to buy, I can legitimately put some of that commission money into his account.

Doubling the Kids’ Money with Robinhood

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This is going to be another short article today. I am still swamped with dog sitting business. I love that so many people are getting vaccinated and traveling. I also love that almost everyone decided to get a dog in the last year and a half. The only downside is that I’m constantly doing meet and greets, and booking appointments. I had two meet and greets yesterday and during one, I had an emergency last-minute request from someone who needed to travel for work, but their dog regular sitter was on vacation.

After more than a year of very few dogs to sit it is an overwhelming, but a welcome change.

In any case, I didn’t intend to write about dog sitting today. We can save that for the May financial update that should come out early next week. Instead, I want to talk about investing your kids’ money.

I started an investment account with Robinhood when the kids were 2-3 year old. In July that will be exactly 5 years ago. It’s a perfect time to look back and see how that decision went.

I don’t like to invest other people’s money. There’s just too much risk if it doesn’t work out. Fortunately, a 2 and 3 year old weren’t going to feel too much one way or the other.

I could waste a lot of words to build suspence before giving you the results, but I wasted that opportunity in the article’s title. Here’s how they’ve done:

Robinhood

For full disclosure, the results include a little free stock from Robinhood from referring friends (and website visitors). If you sign up here, you’ll help make a couple of kids very happy as they’ll get some free stock… and you will too.

No worries if you don’t sign up, because they are already very happy with the growth of their money. They are starting to figure out how money works, but grasped the idea that twice as much money is better a while back.

I should be open and say that there’s no guarantees that you’ll double your money when you invest via the Robinhood brokerage. The brokerage doesn’t make your money double, the investment choices do. The rule of 72 would indicate that they’ve made 14.5% interest per year. My kids have been lucky with that great bull market and I expect things will slow down in the future.

They’ve been mostly in the US total market (via Vanguard’s VTI ETF), but sometimes I buy some fun stuff for them like a gaming conference company or a little Dogecoin. That’s the advantage of having free trades with Robinhood. Five years ago, brokerages offering free trades were rare, but they are more common now.

The other thing I should note is that Robinhood doesn’t have custodial accounts for kids. I had to put the account in my name and I’ll have to pay taxes on it when it’s sold and distributed to the kids. Hopefully, since they are long-term capital gains, they won’t be so bad. Since having separate accounts was difficult, I simply added the same money from each kid whenever I do a cash deposit. This way they’ll each own 50% of the account.

How To Teach Kids About the Stock Market?

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I’m going to go with a quick post today. I’ve been working on the last update of 2020, but this question came up and gave me some pause. We’ll push that update to Wednesday.

For the last five years, I have been investing our kids’ money. They were ages 2 and 3 when I started. It was enough money from grandparents and such to get started, but also not any money that they’d miss. That’s a great thing about investing money when the kids are so young… they don’t need the money.

Now they are 7 and 8 and thanks to investment gains have a nice portfolio. They also don’t know about this money as it was all managed behind the scenes by me. They know about savings accounts and are super proud to be hundredaires. They don’t know that they are multi-thousandaires.

It occurred to me that they are old enough to keep some money in their savings and perhaps save for things they want. They seem to have nearly everything, but when you are an 8-year-old having 21 stuffed Pokemon is better than 20. They might also notice if I keep sweeping money out of their savings into the Robinhood account where I invest their money. This led me to ask my wife about how much we should keep around in savings. This led to her saying, “Why don’t you tell them what you are doing?”

It all makes perfect, but now I’m left with the puzzle of explaining the stock market and index funds to a 7 and 8-year-old. I think I can walk them through it, but hopefully, I can find a good video on YouTube. Of course, if you are reading this, please make use of the comments to let me know if you’ve found yourself in a similar situation.

I’m hoping it goes well and they can see how much free money they’ve made. I’m afraid that they’ll want to take it all out and spend it on Pokemon cards. It will be tempting for them I’m sure. At least at this time, they still have enough Christmas presents that they haven’t even opened up yet.

Do you have young kids at home? Do you sweep some of their savings into a brokerage account? If so, how much money to keep in savings and how do explain what you are doing, so they realize that is going to be very helpful down the line?

How To Give Your Child An Allowance

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How to give your child an allowance? That’s easy, you just hand them money, right?

While the physical act of giving an allowance is easy, there’s more that you may want to think about.

Should you Give Your Child An Allowance?

how to give child allowance

That’s the obvious first question. There is no right and wrong answer here. There are many kids who never got an allowance growing up. Many of those kids grew up to be parents who now say, “Hey, I grew up okay without an allowance.” There’s nothing wrong with that.

My opinion is that managing money helps your child begin their financial education. They start to make choices of what’s important to them. They learn to plan and save for more expensive purchases.

Getting access to money is the first step in their financial journey. I think it’s easier to do it through an allowance, or payment for extra work around the house. Otherwise, they may have to wait until they get a job like a paper route, lawnmowing, or babysitting. Aside from this, they may get occasional birthday money from relatives, but those one-time gifts are unlikely to build lasting habits.

Earning a Basic Allowance

I believe it’s important for kids to understand that they earn the allowance. They have to do some chores around the house. It could be making their beds, doing laundry, cleaning dishes, whatever you feel is most appropriate for their age group. Not only does money means more to you when you earn it, but it also creates an expectation that it is tied to providing some kind of value.

I believe children should also be given the chance to earn extra money for extra work. In our house, that means cleaning up after the dog or making him breakfast. It isn’t always clear what should count as basic work and what should count as extra work. We need to think more about how to draw that line. If you have any ideas, please feel free to leave a comment. I’d really appreciate it.

How Much Allowance to Give Your Child

The general rule of thumb is that every child should get a weekly allowance equal to their age. My 6 year old would get $6 and my 8-year-old would get $8. When I first read that rule of thumb, it seemed like it was too much. We cover many of their expenses… why do they need so much money?

However, the $1 a year rule of thumb will make more sense when you read the next section. When you budget that allowance it won’t seem like so much…

Teaching Your Child to Budgeting His/Her Allowance

There are three basic things that kids can do with their money. They can give it to someone in need. They can save it for something in the future. Finally, they can spend it.

Many people get physical jars of Give, Save, and Spend so that the allowance can be divided out.

1. Give

I believe it’s important to start with the amount of money to give. As parents we don’t focus on giving. However, we have to cover basic needs like housing, transportation, and food. We also have to pay taxes. Many kids live a good life. They don’t have to pay any of those.

My kids can afford to give money. I think it’s valuable to get them thinking about others who are less fortunate.

The rule of thumb is to put one-third of the money in a giving jar.

2. Save

My favorite jar is the saving jar. I’ve always been the type to save my Halloween candy for a rainy day. The comfort of having those “savings” meant a lot to me.

Saving money is important in three ways. A child can learn that they can save money for something extra special. A child doesn’t necessarily need an emergency fund, but saving lays the early groundwork for that. Finally, savings are necessary to take the critical step towards building wealth: investing. (Note: Sometimes experts make “investing” its own fourth jar. I don’t have strong feelings either way, since we sweep some savings into investing.)

3. Spend

Spending is very important. Children can learn a lot by spending money. They may even learn more when they make “mistakes” or realize that maybe they should have spent differently.

Give, save, spend… you have noticed that the math is easy – simply divide the allowance by three. If it doesn’t divide easily, I’d put the extra dollar in the saving jar.

When Should Give Your Child An Allowance

If there’s one theme to remember with everything when it comes to allowances, it’s that there are no firm rules. My 6 and 8-year-old don’t get an allowance yet. It’s not that they don’t deserve one or that we don’t believe they should get one. We’re simply very busy with a lot of other activities between karate, Boy Scouts, archery, and homework. The days go by so fast that we never get to everything.

I hope to get them started on an allowance in the next couple of weeks. I want to have a plan of standard chores and bonus chores. I’m also looking at getting this spend, save, give jar. We might also make due with a few mason jars and some rubber bands to hold them together.

Final Allowance Thoughts

Much of this article is based on my gut and only a little quick research into the best way to give a child an allowance. Like everything in parenting, I’m learning as I go. I’m sure there are more than a few things that I haven’t thought of. If you happen to have more experience or even different gut feelings, I’d appreciate it if you drop me a line in the comments.