A lot of us that weren’t taught how to manage money correctly ended up put a negative connotation on money. Those of us that think that way tend to think the reason people are where they are in life is because of there money or their parents money. They don’t realize that it’s about the hard work that they’ve put in. The other thing those same people do is think that becoming rich is a pipe dream.
How do I know this? I was that person. It’s how I was raised. I never learned how to manage money until I was out on my own and learned MANY hard listens that have cost my family a lot of money and even the chance to buy a house earlier in life. I don’t want that for my children and neither do you. It’s one of our many responsibilities, we must teach our children if we want the best for them.
I’ve been wondering for a while on allowance and when to start with my kids. I never had an allowance growing up. My family couldn’t really afford anything like that so I didn’t have a clue. My mother just made sure I had food everyday for school. I was surprised by what I found and honestly I would have done everything wrong had I not done my research. That’s why I want to share everything I found with you so you don’t have to go through 3-4 pages of google like I did. So below is the questions I had and the answers I found.
Why Should I Give My Kids An Allowance
Allowance is a terrific way to teach your kids how to responsibility manage money without the high risks that they would have as adults.
Teaching them about delayed gratification is an important lesson in life. A lot of us never learned this or did but in a hard way and possibly a contributing factor as to why as of 2022 64% of Americans are living paycheck to paycheck.
If your kids don’t save for that movie they wanted to go see, or the game they wanted, they will learn that they have to save and delay that instant gratification for a even more gratifying event later.
They will soon realize that you have been paying for certain things for them that are a luxury. Take Starbucks for example. You go out Saturday morning as a family and they always want something. A pink drink or chocolate croissant. That could be their allowance. Making them pay for that or chose to pass up on their Starbucks to save for their own Nintendo Switch will be completely up to them.
Allow them to learn this now, instead of them learning this later when they blow there paycheck after they have moved out and are on their own and now have to ask you for rent.
When Should I Start Giving Them Allowance
Statistically most parents start giving an allowance around 5-6 years old. By then they are interested in money and have a basic understanding how it works. It’s more about when you think your child is ready. We know we will have to start with the two old and see how that goes. When you have kids closer in age you may have to start them all around the same time to minimize the fighting.
How Often Should I Give Them Allowance
This is really up to you. It can be every week, every other week or once a month. Just make sure to be consistent. Being consistent on when you give them their allowance will help them manage their money just like you have to do when you get paid.
How Much Is An Appropriate Amount For Allowance
A good figure is $0.50- $1.00 per year old. This is all dependent on a few things. What is your budget? You don’t want to promise them something and not be able to do it every pay time. To go along with budget is how many kids are you giving allowance to? I’m starting with all three kids at once. So I have to figure out the balance between the usefulness of the lesson and the cost of the lesson that is money management. Where you live? The cost of living and luxuries cost different in Maine then they do in California.
Should I Pay Them Allowance For Chores
Do not tie money and allowance to chores. Chores are what we have to do as a family to keep the home running. Simply changing what you call chores to something else may help get them to understand that as a family we all have to contribute in ways and not something you get paid to do. I see a few different phrases used in place of chore my favorite is by Positive Parenting solutions she uses Family Contributions. That’s great for older kids but for younger one you might want to use one of these:
- Family Pie- We all have to give a piece to make us whole. You might even want to make a pie chart they can fill in as they complete pieces of the pie like helping with laundry, drying dishes, picking up toys, doing homework and such.
- Family Donation- we all are donating our time.
Letting them know that their contribution is vital to the family. It reinforces the that they matter and are an important part of the family. When we all contribute it shows how important teamwork and working together is. It also allows us to be able to spend more time together after the work is done with less stress.
Should I Give Allowance For Good Grades
Just like paying for chores, paying for good grades is a bad idea too. You want your kids to get good grades because they care about school not because you pay them too. That, with good teaching and help from you, can be taught. Eventually they will work hard for their grades because they care.
Do I Get A Say On What They Purchase
You’re thinking what if my kids wants to buy a ton of candy or that crossbow? That was what I bought when I was 15 with my first $40 I had made. You are worried they will have free reign and you can’t say no because it’s their money.
Well, for starters don’t make a list of all sorts of things they can’t buy for two reasons.
- They will always find a loop hole. I know I did as a kids. “Oh I can’t go to my friends house? Ok… Hey Ben I can’t come over….. But hey she didn’t say you can’t come over!”
- The list will be ever changing and difficult to maintain.
Instead, and I got this one from baby center so I can’t take any credit, tell them they can spend their allowance however they like as long as it doesn’t cause a problem. They way anytime they want to buy something you don’t approve of you have a reason that you can say no. That crossbow is unsafe, that candy is not good for your health, those clothes are inappropriate for school.
Can They Borrow Against Or Get An Advance An Their Allowance
Nope! Stick firm to this early on. Just like you don’t go to your boss and ask for your paycheck early neither can they. They have to save for what they want and if they blew their allowance then that is the lesion they need to learn and they never will learn it if you bail them out.
How Can I Help Them Manage Their Allowance
I’ve seen this done many ways. Some do a spend, save, share method where they donate a portion, save a portion, and have the rest to spend. I’ve seen others add invest to the mix which to me is also very important.
I usually see the sharing in the form of a tithe. Fun fact, apparently a tithe is one-tenth of something.
More often then not I’ve seen a tithe in regards to church. We are not a religious family so I suppose we could donate to a shelter or wildlife sanctuary. We love wolves and have always wanted to donate to them but I’d prefer to let them decide individually what they want to donate to.
Some Helpful Product & Apps I Found During My Research
MoonJar & Money Savvy Pig
Some type of piggy Banks I’ve seen are Moonjar and Money Savvy Pig. They seem extremely popular or at least the idea does. The Moonjar splits the kids money up into spend, save, and share banks. Where as the Money Savvy Pig splits it up into Spend, Save, Donate, and Invest.
I plan on having my kids make there own banks just because I like them working with their hands and it gives me a opportunity to do more with them. If you want to know how to get them out there check out this post 9 Tip to Get Children into Woodworking.
Greenlight
A parent controlled money app for families.
I ran across this app in my research and it looks perfect for what I want for my oldest when she is a little older. Greenlight allows you to control what stores are allowed to purchase from by limiting where the card works. You can see when the card was used and for how much. They can only spend what they have as it’s a sort of prepaid debit card so no over spending or overdraft fees. Parents also have the ability to open an account allowing your kids to invest in stocks and index funds.
I am in no way a affiliate or partner with any of the above brands or apps. I found these in my research and they seem great for what I am looking for so I figured I’d share what I have found.
I am not a financial adviser and with everything I suggest or review be sure to do your own research and use your best judgement to see if it’s right for you.
