One thing my husband and I have always felt strongly about is making sure our kids grow up being financially responsible. Another is that we want to make sure our kids have are good work ethics and a sense of responsibility. We have been talking about how we could combine the two of these and have decided that allowance is a great way. We wanted to make sure that we were doing it right, so we asked several of our friends for advice first. I know it doesn’t seem like there is much that go wrong with giving kids allowance, but we have found that there are actually some major pitfalls if not done correctly.
Here is what we have found out:
- We are not going to give our kids allowance in exchange for doing their chores. This is part of their normal responsibility, being a member of the family and doing their part to contribute. Instead, we are going to give them allowance once a month and teach them about donating to charity, saving and keeping some for spending.
- We have set up ground rules that they have to follow. They have a required chore (or a couple of them) to do every day, along with any homework before they can have any screen time. Once the require chore(s) are done and they have completed their homework, they get 30 minutes of screen time. If they want more screen time, they can earn up to an hour by doing extra chores that are worth time. For example, vacuuming the living room will earn them an additional 15 mins. This way they understand working gives rewards, and they are also contributing more to housework.
- We have decided that giving each of our children their age in dollars once a month is sufficient. This will allow them to save up for things they really want to buy and it has also given me a chance to help them at the store. They have big eyes and want a lot of things, but we talk about how much they have, and how long it took to earn and what they really want. It also lets them have some extra money for things like the book fair at school, vacations, gifts, etc.
- It is a great chance to set up a bank account for them where they can save their money, and it starts building their credit. Take them to the bank once a month and let them make the deposit and show them their balance and get excited about how it is growing (even if it is slow). You many also decide (depending on age) to set up a checking account and teach them how to balance their checkbook and keep track of what they spend that way. We have provided a free KIDS MONEY TRACKING SHEET below so you can help your kids keep track of how much they have in savings, spending and other (charity/tithing).
The best solution is going to be just to sit down with your spouse/kids and decide what is the best solution for you. Even if it is a couple of dollars a month each, kids need to learn financial responsibility. If they want a new toy, clothes, electronics, etc – take them to the store, let them pick it out and show them how much it is, and then create a plan for them so they can save up the money to buy it themselves. This is such a good lesson to teach them. Money doesn’t grow on trees – it does not for your kids to buy them whatever they want because “they are busy” or “don’t have time because of sports, school, etc”. My kids are busy – my 12-year-old has some kind of practice every night M – F and she still finds time to help around the house, do her homework, AND still have free time. It is about managing time wisely as well. These are life skills that we are teaching our kids. Helping them become self-sufficient human beings. Next week I am sharing more about how “doing to much” for our kids, is enabling them to expect more and do less. I hope you will come back to read it.
What do you think about allowance? Do you give allowance to your kids? Why or why not?