Yes, we give our kids allowance. And we have been doing so for over 2 years. Before we started, I read a lot about allowance and teaching kiddos about money. There are a lot of different opinions and thoughts regarding the matter. It can be quite controversial. I'm not trying to stir up a pot- this is how we do it and it works for us, so I thought I'd share.
At the beginning of every month, our kids get allowance. They do not have to earn it, they are given it. Chores are an expected part of being in our family, piano practicing is part of being in this family - you do not get paid for it. Tom and I had different opinions on this at first, but I think you have to figure out the purpose of allowance. Our purpose is to teach our kids about money. We use other things to teach about working hard or about responsibilities. Allowance is about money and I think it's hard for a little one to budget and plan when you don't know how much to prepare for. That can come later in life. Right now we are just working on the basics.
Anyways, we give them $1 for every year. My six year old gets six dollars a month and my nine year old gets nine dollars a month.
I stop by the bank every month and get ones and rolls of dimes. They have to pay 10% tithing and 10% savings. Everything left over is theirs to spend. I use the roll of dimes so they can trade dollars for dimes - it's easier for them to count and make change.
Tithing goes in their tithing jar and savings goes in their piggy banks.
The rest goes in their wallet, aka a pencil pouch.
They are responsible for recording every penny that comes in and comes out. I like them to be able to see what they are spending their money on.
Because they get their own money, we don't buy things/stuff for them unless it is for some occasion. If they want books from the book order, they have to use allowance.
My oldest can not save money - it burns a hole in her pocket! But, she is learning how long it takes to save up money and how fast it can go. While we were at a gift shop the other day, she was shocked that it would cost $4 to break open a rock. She knew that if she wanted to do it, we would tell her to spend her own money. She has "wasted" a lot of money on little silly things, but I think she is finally getting it and money is becoming more valuable to her.
There is nothing fancy or elaborate about our system. I even hand write their register! If it gets too complicated, it isn't long-lasting in our home. It is simple and it works.
Do you give your kids allowance?
Please note - I do answer any questions that you leave in the comments. I usually just email you back. I apologize that the answer isn't up for everyone to read.
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We do something very similar. $1 per year/age so our 13 year old gets $13 per week. 10% tithe, the remainder is divided in half with one half for wallet (free spending) and the other half (long term savings). We will buy our son an occasional item in between birthdays and Christmas. Occasionally we will contribute towards the cost of something he wants. We did this with all our children and they are all wise in the use of their funds.
I love this! This is how I absolutely plan to do allowance - but I'm pretty sure B thinks it should be tied to work. We'll sort that out though, maybe I'll direct him to this post :) Growing up we were given $5 a week - and had to keep track of every penny. But I love the idea of 10% savings and 10% tithing automatically - we do it, so why shouldn't they?
Do you do this with your youngest? And do you think that when you started this 2 years ago was the perfect time, or do you wish you'd started it earlier?
Sounds like a great system. Our oldest is now a Senior in college and she learned to budget her money the hard way-she got an allowance and when it ran out, it ran out!! She is my penny pincher now...so proud of her. The youngest is the saver, always has been. We do not give her a set allowance, we discuss needs/wants and determine whether "we" are going to pay for it or if she will dip into her own savings (she worked as coach last year and saved quite a bit). She knows the more she dips into it the less she will have while away at school next year. I do love that you don't tie it to chores. I agree that that is just being a part of the the family.
My husband and I were just talking about starting something like this...how else will they learn about money right? I like that yours is not tied to chores - I think if you live in the house you can help do the work!
I like how you have them record all of their earnings and spending so they can see where there goes. I haven't been doing that with my kids but now I will start that too. Thanks for sharing how your family handles this...I like seeing what others do. Appreciate you sharing :)
Jennifer
That sounds great. We had an allowance growing up but the amount didn't change and it was tied to chores. I hated dusting, so I stopped. While I wasn't getting paid, once I started babysitting it didn't matter so much. It's great that you are being so consistent.
Great, simple!!. My question is do you carry around their ledgers with you in case they find something they want at the store?? I can't stand them always begging me for things and saying they have enough money AT HOME. Also. My kids just want to buy junk food with it, mainly candy bars at the check out. Do you have any rules on HOW they spend their money?
I think it's a great wait to learn kids how to be responsible with their money.. I will definitely do something like this with my kids.
I really like this system. We've debated the subject to death in our house, and I'm grateful for the way you presented it. In the end, it is just a lesson in money. I never wanted to tie it to chores or anything else, although I'm happy to offer extra jobs that earn extra money (clean out the car for me, pull weeds, etc.). Good system. We'll be putting one in to place around birthday time in November I think.
We don't have anything like this at the moment but I love your idea & is thinking of doing something like this with our kids.
My husband always says he wish he learned how to budget when he was little.
This is fantastic, we have been thinking about this lately, thanks!
this is awesome, my son turns 4 next year so I will borrow your idea then. In your post you mentioned you started two years ago and one of your kids is 6..How much did your little one understand the concept then? Also, what is the tithing for? Is the savings off limits?
One more thing...I noticed on the register there was a tithing paid on a lemonade stand and no payments on birthday money. Do you have a system for those situations.
Very organized system. I love hearing about how different families handle the allowance/chore issue. Every family is different and as long as you are organized and consistent, I think you will be successful.
My husband and I have four kids and were looking for an organized way to teach kids & teens money management. We created a system that has now become a free website and app for families. You can find us at www.moneytrail.net or in the Android app store.
I love this. I've read about a similar plan where a child would get a certain amount per age (typically quite a bit more) and the child would gradually become responsible for more and more as they got older - including necessities like clothing, and all entertainment. I love that you have your kids track what they spend their money on - this is something I've tried to train myself to do as an adult, and it's hard to pick up later in life!
You said you give allowance based on age, $1 per every year. You give allowance once a MONTH or did you mean weekly?
You pay allowance MONTHLY or did you mean weekly? Allowance based on age is great ($1 per every year) but if its monthly, thats a looong time to save for a small item.
I am so glad that this works for you. It is at complete odds with my feelings, lol, which is why allowance wouldn't work here. But I like your plan for keeping track of their money. I will have to use it.
Just my 2 cents--
I am against allowance on some levels--not completely against it, just sort of against the "freely given" part--they need to learn to deal with money somehow. BUT, no one in the world is handed money--unless you are on welfare of some sort, or rich! Money should be earned. Teaching them to work is great. Teaching them to handle their money is great. Teaching them that to have money means they need to earn it--is even better.
Chores around the house should not be paid for-I fully 110% agree with you. The extra jobs-yes, that is what we pay for. My kids know that if they want money they have to earn it either by doing jobs around the house (there is always something needed to be done) or by earning it out of the house--baby sitting, lemonade stand, raking the neighbor's leaves, etc.
Are you LDS? I am and I only ask because I never see the term tithing and 10% being used together.
I love these ideas! My son is only 3 months but I think it's never too early to plan. Being a banker myself and growing up with my dad as a banker I see the importance of money in people's lives everyday! This is wonderful to help teach budgeting to children!
So excited about this. Our oldest will be four soon and she already has a few chores related to her toys, bed, and clothes (she helps me fold and makes sure all dirty clothes end up in the right place). Love the immediate tithing 10% and save 10% very good practice for later. Both our girls are very good about wanting to either put any money they get (finding coins around, from grandparents, or even money for a snack at a basketball game) into their piggy bank or taking it to church!
Thank you for this post and we plan on using it to help us when we started allowances. But with still earning it separately from their regular chores.
Great idea! I wish I had learned about tracking money when I was a kid. I think it would have made finances a less horrid task as I get older. I will have to keep this in mind as my son grows up. He's still a little young for it now (2 years old).
Cory of Tiny Tipis
www.TinyTipis.blogspot.com
Racheyy, I am not LDS but we also tithe to our church. A tithe is, by biblical definition, 10% of the "first fruits" that come into your hand (gross amount). This is not a LDS thing, it is a biblical concept. :)
I like the idea of once a month allowance based on age. With 4 kids, I can't afford it per week. I'm still debating how/if we'll do this for our family. :)
The reason for not tying it to work is because they might choose to not work (which is unacceptable) and have nO money
Thanks! My oldest is getting ready to start learning this, I too have been trying to tie it to work. But frankly, she should do everything we ask her no matter what. My husband and I get an allowance similar to this, we should extend it to our kids and teach them how to manage money at the age of 3&4! Thanks again for simplifying it.
Love the chart to keep track of saving and spending! We have a lot of impulsive dollar store purchases over here too. =)
I included a pic of your chart and a link to this post in my allowance roundup.
http://www.activity-mom.com/2013/02/allowance.html
Same in my family for years. We all live here,we are all family. Allowance is given each week for money management. Just like in the real world, if you choose to spend it all in one day, you have nothing left til the next payday.The amount stays the same. Chores come with being part of a family. We all take care of our home-its not a job so no money is involved. Also a biggie in our family...we dont pay for school grades. We believe and have taught our 4 children early on that grades are self earned acomplishments. We help in other ways such as buying a book, supplies, field trips etc...things that parents are responsible for. As our girls get older (now 25, 20, 17 and 13), we see the fruits of our labor. They (older 3) work and make their money choices. We are proud parents too see what they have achieved so far...accomplishments that were not bought and paid for:-)
I would've LOVED! it if my mother had done something similar when I was growing up. Just like your daughter, at 20 years old I have trouble saving money. It's awesome that you have them automatically tithe and save. Im not sure what to make of the $1 per year/per week concept but it's worth giving a try :)
No allowance at our house either. Chores are just a fact of family life. Everybody works. My job as mother is to teach them to be self sufficient adults who contribute to society and make the world a better place.
Extra jobs are always available for anyone wanting to earn money. We don't buy toys for the kids unless it is birthday or Christmas. Yup. We are mean.
They are also required to pay tithes and save 10%. We match every amount they put into savings though - to encourage them. It works with some, not with others.
However, when the kid lets turn about 8 or sometimes middle school they are presented with a prepaid debit card. It has the measly amount we would spend on their clothing and sundry items for the school year. They are in charge of thier own money and have to keep track on-line of what they spend. If they want a brand name pair of shoes and don't have enough for a coat - so be it. They get to make all the mistakes while they are sheltered at home although they still suffer the consequences.
We can track or freeze the card, they can't spend more than they have. They get a real world understanding of how cards and money work.
Laurel! How funny that I happened upon your blog this morning via Pinterest! Hope all is well with you and Tom! John and I are still in KC raising two little girls! God Bless!
My 8 year old has his own savings account....he saves birthday money and christmas money and his grandparents send him 5 dollars every now and again as they live far away. He is excited when he gets his bank statements each month and looks at it carefully. He has his own wallet and debit card. We were recently at walmart and he wanted a toy...I asked him to look at the numbers and tell me how much it costs....34.99.....mom thats a lot of money and he looks at me and says so innocently nope I'm not going to pay that much...
My 5 year old no concept of money he likes 25 pennies because that's more than 5 dollar bill ... lol.....we will start him an account once he is in grade 1......
My husband is taking a personal finance class right now through his MBA and so he came home with a genius way to teach the kids about money. It's the same sort of idea - $1/year of age, but each week. 10% goes to tithing/charity, 10% savings, 30% to taxes (they get a tax return at the end of the year after they file their taxes), 20% to room and board (back to mom and dad) and 30% to spending. I THINK that was the percentage break down. The kids are allowed to use their spending money on WHATEVER they want - we are not allowed to tell them what they can and can't buy.
I like teaching them about budgeting as well. It works pretty well.
Ugh! This topic has been coming up quite frequently in our house lately. We have two daughers, age 13 & 8, and unfortunately have not been consistent w/ allowance/chores/ets. I love the idea of $$/years old & not being tied to chores. One questions, what are the consequences for not completing their chores/tasks when asked or in a timely manner? Thank you!
I LOVE this!!! I absolutely agree with you that being a productive member of the family (ie. chores, etc.) is not something that you are paid to do but I fully believe children should learn the value of money and how to save/spend it. I am going to adopt your system with my 5 year old son. We currently have three jars where money is divided up the same way you have {10% tithes, 10% savings, remainder to spend} but I never thought to give a specific allowance based on age per month. I adore the idea of having them show what the money was spent on. He is a great reader but he is AMAZING in math and this will be right up his alley! Thanks for sharing this!
Just saw this from Pinterest and I think this is such an awesome idea. I like the fact that it teaches kids the value of money so early, hopefully helping the good habits form now. I also like the fact that it isn't tied into the chores to make them feel like it isn't expected of them.
Thanks again!
Thank You so much for sharing this! I have a 10 yr old, 8 yr old and 5 yr old and have been researching a lot of different methods when it comes to allowance. Things are so much different from when we were kids LOL, but I like how you explained that emptying the dishwasher or cleaning your room isn't something to be rewarded for, its part of being in the family and that is what I have been trying to teach my kiddos :) i really look forward to trying out this method and seeing how it works for us. Have a great day!!
We had kind of a hybrid system for our kids. Their allowance was based on age but there was a minimum and a maximum as well that depended on their performance. We had a short conference each week with each child and talked with them about how well they had kept their rooms clean, how well they had done their chores, and what their attitude was like overall during the week. They always got the minimum but would get more if they had high percentages with their performance and attitude. We had one who always had high marks for performance but lacked a bit in the attitude department and another who could never keep his room clean but was always happy and willing to try. We would always compliment them on the things they did well and helped them figure out how they could do better on the things that they struggled with. We also had extra chores with prices attached that they could do if they wanted more money. We also had them set their tithing aside and pay it at least monthly and divided the rest equally between spending and savings. We opened savings accounts for them so they wouldn't be tempted to spend it. When they wanted to buy something that cost more than their allowances would cover, we offered to match the extra they saved up for it. We continued that practice for more expensive items and school activities when they got older and had income from part time jobs. We also set a budget for what we were willing to pay for clothes. They could buy one outfit with all the labels or several if they didn't worry about that sort of thing. They've continued as adults to be savers and bargain shoppers. A couple have had to train their spouses, though.
Heather Datus A thought would be if they don't complete their tasks then you get to take a "maid service charge" out of their funds. They don't want to take care of their things, ok, then they will have to pay "the maid" to pick up after them. So you get paid to pick up their things or even do their chores. But make it their choice do their things or pay the maid!
Heather Datus An idea would be that if they choose not to pick up their things or do their chores you get to charge a "maid service". You will pick up their things or do their chores but you get to take money out of their spending money because they chose to have "maid service" instead of taking care of their things!
Do you ever answer the questions you're asked here?
Love this! I could get rich!
Wow, thank you for this! We've never really given an expected allowance just because nor have we paid the kiddo's for normal chores...unless they want to pay me to do my expected responsibilities;)
I'm just not very consistent with the paying "commission" part. I love the idea of the binder and check register. My oldest would definitely use this!
I'm gonna have to put one together.
Thanks again!
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