Tried and True allowance strategies

[Anonymous]

I'll be doing what my parents did once my daughter turns 13. Estimate the cost of certain expenses for the year (lunch, haircuts, clothing, entertainment, etc.) and the total amount was then divided into a weekly allowance and I had to create a budget plan (with some help) and live with the consequences and benefits of my choices. Standard chores were done because that is expected of family members. However, I was paid for doing certain seasonal chores (shoveling snow cutting lawn, cleaning garage, etc.). Saving was encouraged by the very generous interest rate at the Bank of Dad.

[Anonymous]

We started young, with $1 per grade per week. (So, 3rd grader gets $3 per week.) Not tied to chores, and parents pay most expenses. The purpose of the allowance was to teach the kids how to save and spend wisely. What worked for us was something I think I read about here ages ago -- we pay a crazy amount of interest. Like, 1% per week. I keep a spreadsheet for each kid so the math is easy, and they don't have the money in hand -- just a balance in the account.

The point is that when they're little and they want something from the toy store every week, they are quickly rewarded if they hold off. The money stacks up pretty fast, and they understand that it's worth it to save.

[Anonymous]

Anonymous wrote:Our son is 7 and we just started formal allowance.

I made a chart of specific chores for him. Examples are things like: take the bathroom trash out of the can and tie it up and replace the bag (when we ask, otherwise he'd bag up a tissue and ask for credit), or get every piece of clothing for the day into the hamper without us asking, or get every dish/cup of yours into the kitchen on the counter without us asking. If he does a task he puts a check in that box. Boxes are for the whole week. If he does 10 tasks in a week, he gets $5. If he does fewer than that, no $. He's about 2 for 3 so far. He's too young for spending money for movies and stuff, but yesterday he wanted a $15 toy at Target (we were buying another toy for the family) and he used his $ to get it. He seems proud to do the work and proud to buy things/save his money.

For us at this stage it's about sticking to a routine and remembering to take the initiative to do stuff on a regular basis. The generic "clean your room" or "take out trash" was too broad for us to follow through on. So our weekly system works for us. For older kids, I'd imagine it's much of the same?

This is the tween and teen forum -- why would you post about your 7 year old?

[Anonymous]

I'm op and I don't mind that the parent of the 7 year old answered! I do want to hear from parents that have made it out on the other end with money smart kids, but all ideas are helpful!

[Anonymous]

Anonymous wrote:

It was NOT tied to chores. You do chores because you live here and you're part of the family and you love your family and want to make their lives easier and their environment nicer to live in.

I agree passionately with the bolded. I do not pay you, son, to rinse the dishes you just use or carry out the garbage that you threw out.

DS, 12, gets $17.50 a week. He's inclined to save it and periodically purchase one pricey thing. But he always has a few hundred in savings.

This!

Do not pay your children for doing chores. Every member of the family must contribute. It is an important part of growing up and becoming independent and responsible adults.
When the kids are little, it is hard for them to contribute, of course. So that is when we had a cleaning service. We actually cancelled it several years ago, because we wanted kids to learn how to take care of the household.

Children don't get any allowance (girls - 10 and 12), but they do run small errands (e.g. walk to a local grocery store to buy a gallon of milk) and I often let them keep the change. It adds up. I might start giving them small allowance, because they occasionally like to walk to a clothing store (no brand) by themselves to buy clothes. Nothing expensive. I usually give them $20. This happens about once a month.

[Anonymous]

Kids are 6 and 8. They get a dollar for each year of life, so my 8 year old gets $8 weekly. They put their money into a bank that is divided into Spend, Save, and Share. We match 1:1 any money that is put into save. It is used for big purchases and have to be discussed with a parent before purchasing. The Share money is for donation to a charity of their choosing. The kids recently used their Spend money on scholastic book orders. They were so excited to pick a budget and adhere to it. Allowance is not tied to chores. Like previous PP, we all work together as a family to get things done.

[Anonymous]

Oldest kid is in high school. Allowance starts in kindergarten and goes up every year.

It is theirs to spend/save/donate as they see fit (unless they want to buy something they're not allowed to have -- no TV in the bedroom, for example -- and if it is something they are allowed to have it may still be regulated, so time on the game system they pooled their funds to buy is still limited).

Even in K, you get enough money to buy SOMETHING each week. It may only be a candy bar, but you don't have to save weeks to buy it.

We use the phrase "That's what your allowance is for" a LOT.

Allowance isn't tied to chores. Chores are tied to privileges. (So if you haven't done your laundry, no screen time and I'm not driving you to Target.)

Even without it being a requirement, my kids donate to charity because they've seen their parents do it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op here. Thank you for responding. My youngest is 5 so quite young. They ask for little toys at every single store we step into from the dollar store to target to the grocery stores. I say no 99.9% of the time because although it's usually pretty cheap stuff but we are up to our ears in toys from the various holidays and birthdays and grandparent visits. Once they have their own money, do you allow them to spend it even if it's on a piece of chintzy plastic you know will break sooner or later? Or something you think you could realistically get cheaper elsewhere?

Dave Ramsey (Money Smart Kids) says you let them spend it on whatever they want so that they learn from their mistakes when the stakes are low. He also recommends giving kids the cash for their expenses (i.e. lunch money, clothes money, sports fees, lessons, etc.) and establishing a bank account for them so that THEY start paying their bills. You still supervise, but they have to get in the habit of seeing how much money they spend, budgetting it out over a period of time, and seeing that there is a limit. His philosophy is that it is better for kids to learn this on a small scale and while you have a chance to discuss it when they get into trouble (i.e. over spend) rather than sending them off to college where you aren't there to teach it... and the stakes are higher b/c they are adults (and therefore able to get credit cards and debts).

following up on my own post.... I forgot to say that this is supposed to start at 14 yrs. old. (paying the bills with money you give them).

[Anonymous]

No allowance, which to me means that it's an amount given on a set schedule. Kids are part of the household, everyone does what they can to maintain/benefit the household, to the best of their abilities. For a 3 year old, that may be sorting dry flatware into a drawer, for a 12 year old, perhaps choosing what dinner will be, selecting the ingredients when we go shopping, prepping and cooking it, and serving it. Everybody has no less than three things to do for the household everyday, and if kids want to earn money for doing extra things, so be it. All tasks for extra money are proposed to me, but they can't be the normal things around the house. I agree to the price, timeline and agree that I don't want to do it/don't have time, or I decline. If I decline, all the kids can counter with another offer. If the job is not done within the agreed time frame, I do it the following day, and the child pays me for doing it at the agreed price. I've paid as little as $.50/per trashcan to have every trashcan washed, sanitized and sprinkled with baking soda to as much as $30 to have all three vehicles washed, vacuumed and shined in 24 hours or less. The kids learn to brainstorm, present an idea, accept a rejection and try to counter with a better offer, what happens when when you don't fulfill an obligation, debate whether something is necessary or overpriced, etc. They learn to value the things they do for the family everyday as part of being the family, and the extra tasks make them learn to value hard work.

Each child has 4 envelopes. 1st is giving, 10%, may be used for any charity they want, at any time, so one child gives every week at church while another saves for different things for an animal rescue. 2nd is forever savings, 20%, to be used only to save the child's life or someone else's. 3rd is savings for a goal, 30%, the child must save the money a minimum of 30 days, but the goal may be small (skateboard) or large (car). 4th is spending money, 40%, and as long as they clear it with me first, they can buy whatever they want with it; the last thing I declined was the child who wanted to buy 10 bottles of kefir without considering how much room we had in the refrigerator, the last I approved was clothes for one child and 3 bottles of kefir for the child who reconsidered how much room was actually available.