Last summer my friend Carla asked for feedback on Facebook about giving kids an allowance. She received a lot of great comments and advice from her friends which I found useful for coming up with a game plan for my son. At the time, B wasn’t receiving an allowance of any kind but I had been tossing around the idea in the back of my head for a while but I wasn’t sure how to start or what exactly to do.
I knew I wanted to teach him about money in a way that was age appropriate and in a way that would establish a base for him to build off of in the years to come. I knew that I wanted him to contribute to our household with regards to chores but I wasn’t sure if the two ideas should be linked together or if they should be separate. Thanks to the feedback Carla received plus the additional research I did on my own, I finally came up with a system that works for us.
Allowance Based Upon Age
B receives an allowance based upon his age. When he first started receiving the allowance he was eight, so every Sunday he received eight dollars. Now that he is nine he receives nine dollars.
Spend Save Give
When B receives his allowance money, he divides it into three categories: spend, save and give. He has these jars from Etsy, that Carla’s friend used and they work great for us. Of course, you could always make your own as well. From his nine dollar allowance, five dollars goes into spend, two dollars goes to save and two dollars goes to give. This is something that I determined for him.
He is allowed to spend his spend money any way he wishes. Sometimes it eats a hole in his pocket and he spends it right away. Other times he saves up his spend money and buys something he has been wanting. His save money is money he is using to save for something that we both agree upon. Currently he is saving his save money for our Florida trip, so he is able to buy souvenirs and other things he would like while on vacation. His give money is money he gives to a charity or organization of his choice with my guidance. He is currently giving his give money to his karate dojo. They put the money in their fund to help students and their families with karate dues.
B has daily and weekly chores but the chores are not tied to his allowance. The allowance is not a reward for doing chores. Instead the allowance is a gift from me to him, to help him learn about money. His chores are his responsibility for being a member of the household. There have been times when I have held back his allowance money because he was lax on his chores. However, I believe that as the gift giver it is my right to decide when and if he receives the gift. Most weeks he does get his allowance money. But the weeks he doesn’t, it is a good lesson in expectations and consequences.
Teaching B about money has been a learning experience for the both of us. Hopefully I am teaching him life skills that he will be able to carry with him into adulthood. The concepts he is learning now are ones that I didn’t learn until much later in life. It’s also caused me to re-examine my habits with regards to spending saving and giving to make sure that I am practicing what I am preaching.
I will admit that I wasn’t great at giving. I would give sporadically throughout the year but now I give consistently every month to three organizations that I care deeply about. I donate my give money to Planned Parenthood of Michigan, the ACLU and the Sierra Club. If you are wanting to up your give game, I would recommend that you use Charity Watch to determine how efficiently a charity would use your money. At the end of the day, we all want our donations to matter regardless of where we donate to and Charity Watch makes it easy to make sure that is the case.
Now I want to hear from you. How do you teach your kids about money?