Kid's Allowance: Deferred Comp keeps stock in family

Kid's Allowance: Deferred Comp keeps stock in family

Our kids get an allowance of $5 a week and we used to pay them weekly. But it became a challenge to come up with three five-dollar bills every Sunday, until we decided on the solution of just paying them monthly. This was a lot easier, since ATMs dispense twenties and since Chicago Public Schools don't allow kids to buy lunch with twenty-dollar bills. I know! Too much cash as a temptation for thieves or something. But it means finding cash in denominations of singles, fives or tens  around our house is akin to finding empty counter-space in my kitchen.

Everything was rolling along smoothly with the $20 a month allowance system, until my son Kyle, dang math-wizard that he is, realized by paying them with this method we were shorting him and his siblings $20 a year. I didn’t even realize we were doing this, although my husband, dang math-wizard that he is, probably did. It came up at dinner yesterday and incited a protest along the lines of Occupy Wall Street.

“No!” my husband said. “We’re not shorting you $20 a year. Of course I’m aware of the math here, that getting paid $5 a week equals $260 a year, versus the $240 you receive by getting paid monthly, but you see we’re simply deferring your comp. At the end of the year, depending on how we’ve performed as a family and your performance within the family, we’ll pay you your $20, but probably not all in cash. A portion of it, perhaps a good sixty-percent, will be paid in family stock, which will vest over the course of the next four years, approximately when the boys leave for college. I suppose we could just pay you all up front, but we need to be assured of your dedication to this family and that if you should, for some reason, choose to leave this family early, you’ll also be forced to leave some cash on the table.”

You see what I have to put up with? It’s like when he accused me of outsourcing his birthday cake. I’d asked the babysitter if she could make it, from a mix, while I was on a trip, so I could frost it the night I got home, the day of his birthday. I mean, have you ever tried frosting a warm cake?

Regardless, because of Kyle’s meticulous accounting skills, it’s come to light we must somehow come up with an extra sixty bucks at the end of the year to compensate our children within our new payroll system. It's only fair. That was the original deal we'd struck with the kids. I just hope they don't get wind of the new in-house income tax system we're implementing this year.

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