Parents whose parents’ tax allowances say they are helping them

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  • When their children were young, Jeff and Leslie Fuller set up an alimony system that included taxes.
  • The girls “paid” 25% in taxes, which went to the family fund. Later, the group decided how to spend the money.
  • Now, the daughters say, the lessons about taxes and budgeting are still good for them.

When his daughter was 3 and 1, Jeff Fuller had an idea. Inspired by a colleague’s advice to “let your kids make mistakes that don’t matter when they’re young,” Jeff envisioned a system for his girls that would serve as a training ground for the real world. This system will center around one of the most challenging aspects of adulthood: financial management.

When Jeff shared his unconventional plan with his wife, Leslie Fuller, she loved the idea, and together they implemented the system. They will pay their daughters, Danielle and Sami, $1 a week for each year of their age, and in return, the girls are responsible for the same amount of chores.

So, when Danielle was 3 years old, she took care of three age-appropriate jobs that her parents paid her $3 a week to perform. With each passing year, the girls earned another dollar and became responsible for another task.

Girls pay 25% in ‘taxes’

In and of itself, this seems like clever but fair regular allowance structure. But Jeff and Leslie added a catch – their daughter must pay taxes on their earnings, just like they did when they grew up. Family tax rate it’s 25%, and girls are expected to put an extra 25% on savings and encouraged to donate 10% to charity, but it is optional. And while they can spend the remaining 40-50% of their allowance as they see fit, that’s the long and short of their spending money.

Unlike many of their peers, Danielle and Sami do not beg and pester their parents to satisfy their every whim. Instead, they know they are responsible save their money and choose whether or not whim is how they want to spend it.

Taxes go into the family pot

Although the 25% child benefit tax on 3-year-olds may seem cold, the tax does not go back into the wallets of mothers and fathers. Instead, Jeff and Leslie continue their small-scale economic system, and taxes go into the family pot.

As the pot begins to build, the family of four democratically decides what to do with the money. First, they will nominate the item they want, and then put it to the vote. Over the years, family tax-purchased items have ranged from trampolines to microwaves.

And just when you thought, “Two little girls who were chosen by their parents to finance a microwave seems like corruption can infiltrate even the smallest government,” Danielle and Sami are still crowing about their mom for the win. Leslie thought that the old microwave was good enough to fight for a few more years, but the rest of the family, tired of fighting the dying machine for snacks, disagreed.

The system set girls up for success later in life

As a mother of three children myself, I have found that the best parenting advice comes from those who enjoy the long-term results of their wisdom. And that’s the thing about the Fuller family. When I talked to the four of them on Zoom, I saw Sami teasing her dad and Danielle standing up for her mom if she felt the story might cast her in a negative light. They laugh and reminisce, and I realize that they share the joy, loyalty, and mutual respect that we all hope to share with our children one day.

Not only have Danielle and Sami grown up to be the kind of adults I think most parents hope their kids will be, but they’ve shown a lot of success in their unconventional parenting system. For example, they both agree that the family tax allocation meeting gave them negotiation and pitching skills.

Sami recalls key moments over the years when he baffled his friends with his insistence on delaying major purchases in order to retain a buffer of savings. But when he was young, the Fullers visited Disney World, where Sami blew all his savings on a magic trick kit that he regretted when he realized it meant he wouldn’t be able to afford anything else for the rest of the trip.

So, while many of us had to learn that lesson the hard way when we bought a house above our budget and then realized we couldn’t afford it, Sami took it as a girl. Stories like these illustrate Danielle’s description of her parenting system as “cradle-to-grave financial literacy.”

The system evolved over the years as the girls grew up

Over the years, Jeff and Leslie developed a system to reflect the ages of their daughters. When the girls entered their teenage years, Jeff and Leslie found that coming up with enough chores for them to complete each week felt almost impossible, and they moved to the point system.

difficult chores earned more points, and instead of assigning tasks to each girl, they put a list of chores on the fridge, complete with their point value. These tasks were then given out on a first-come, first-served basis, and soon waking up on Saturday to pick the most valuable task before her sister could get to it became a weekend ritual for Danielle and Sami.

That’s the genius of the Fullers’ system: It incentivized Danielle and Sami not only through rewards but through the consequential reality that we all hope our kids will turn into personal values. Things like “work is an opportunity” and “an investment in your family is an investment in yourself.”

Despite how heavy the system may sound to some kids, the sisters agree that it never felt like their parents were pushing them into the deep end of the pool. Instead, it felt like they were in the pool with them.

And yes, they let their daughters struggle, but they all knew they would never let them drown. When Danielle used this analogy, I was reminded of Jeff’s inspired advice for building systems in the first place – let kids make mistakes when they’re young, and it’s okay.

Leslie echoed this sentiment: “If you want your children to know how to make decisions, let them. Let them experiment in the parameters you give them.”

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