Allowance/Money Management

[sierramv]

There is a thread in the unschooling forum about this and I'm curious how others approach this. Our 7 year old, who is very money aware has been asking to do chores for an allowance.

I feel that there are some things they should do, like pick up toys and make his bed, because those are just part of maintaing his area of the house, but taking out garbage or helping with laundary would be Xtra chores. What do you all think?

Alot of the unschoolers give an allowance without expectation of doing chores, and I am not totally against that either because we have a three year olld that would like would like to be able to get an allowance as well.

Which leads to my second question, do you let them spend it on whatever, whenever they want? Any good age appropriate resources for teaching money management at this age??

[frontstreetmama]

well, I do both... my two dds get a base allowance of $5/week. this is not for doing anything, they get it no matter what. they also are expected to contribute to keeping the house clean by doing whatever needs to be done, this is not tied into their base allowance, but rather a part of co-operative living.

if they want to make extra money, I let them do 'jobs'... i.e. if you fold and put away a load of laundry, I'll give you $1... this only usually happens when there is something they really want... these extras we keep track of on a chart and I pay it at the end of the week with their allowance...

the girls are expected to put 10% of all their earnings into their bank account and 10% away to donate to charity - which they do at the end of the year... they figure out their percentages and keep a tally of how much comes out of their bank account to go to charity at the end of the year...

if there is something BIG they want, I will let them negotiate that if they earn half, I will put in half... other than that, they are allowed to spend the rest of their money however they want...

during the week, I pay for things that we're doing... however, if they want something like an ice cream, they have to pay for it themselves... or if they want to go bowling out of the blue, they have to pay for it... if they have already spent their money, I will sometimes lend them money but set out very clear terms for them paying me back...

I hope this system teaches them certain things about money.. my parents never taught me about money... I don't think they knew much about handling money... now they do, but not when we were children and I think not knowing anything about money led to me claiming bankruptcy in my twenties... now I am on my way to being debt-free except for a $120000 mortgage on a duplex that will hopefully pay for itself... it's been a long road and I hope my kids are a bit better off in a financial sense... not necessarily having a lot of money, but knowing how to manage whatever they have!

[mum21andtwins]

We on't really do an allowence we just try and get all our needs/wants met as much as we can if we can't we have an honest discussion about why we can't and what we can do to get whatever it is the kids want.
I think we might move toward an allowence when the twins get a little older, if we do this will be their money no strings attached. it simply oes not make sense to give them money and say this is your but only if you x,y,z. if you add strings it is not their money still yours
The best way to learn about money is to use it spend it all on your own, and better this is done when they are young and at home than when they are newly moved out of the house and easy to get into money trouble.

Thats my 2pence anyway

[LilyGrace]

We make the money lesson appropriate to the age.

In the beginning, there was allowance and chores, but the two were not connected. Chores, because we're members of the family. Allowance, because money management skills need to be learned in a safe, constant setting. We bought the Money Savvy Pig and set it up with two conditions:

1. SOME of his allowance had to go in each part. We didn't enforce percentages because as adults, that's not how we manage our money. There's no law that says we need to put 10% here or 5% there.

2. Money taken out of the "SAVE" section needed to be thought over for a week or so first. It taught how to keep away from impulse buys.

At the end of the year, the "INVEST" and "DONATE" portions were gone over and matched. Mostly savings bonds for investing at this point. Donations were also given throughout the year, when The Kid found a cause he wanted to give to.


When he hit 10, and got a firmer grasp on what money does and how it works, we changed the set up. No more Money Pig. Now we have The Bank Of Mom and Dad, where jars are brought out on allowance day along with his bank book (a notebook I filled with Excel made register forms). He has the opportunity to earn interest on his savings and has pockets in his notebook to store wishlists, brochures, and other little things. And no more freebie allowance. Now we adhere to a contract that he filled out with times/dates of when he would complete his chores. Anything done before that, he earns allowance for. Anything after, he does for free. He doesn't get out of doing the chores, just gets out of the money for them. We wanted to set the stones for responsibility in an age appropriate way.

Our goal is to continue to evolve both allowance and chores to be separate again. As a teen, he'll need more cash for daily life and we have no problem with that, but the responsibilities tied in will be different. His bank account will have the money deposited into it for clothes, supplies, etc. and he'll be expected to budget his money so that living expenses are taken care of. Chores will again be done because they need to be done, but we recognize the different time tables a teen has. As long as it's all done at least once weekly and communal areas stay clean, I have no issue.


We're considering getting Dave Ramsey's Financial Peace Jr kit for him, just in case we missed anything. I didn't get a whole lot of financial ed. growing up and it's taken me a while to get a handle on things. I'm trying to find a balance between being relaxed and giving him all the information he needs so he is at least knowledgeable (though I'm still certain he'll make mistakes and be an idiot with his money sometimes, like we all are). I want to give him the resources without making it all centered on Do's and Don'ts, you know?

[NightOwlwithowlet]

My seven year old has basic allowance of $3. It isn't tied to anything or any chores. He expected to do basic chores like cleaning up after himself, feeding the dogs, putting away his back pack and shoes, and putting his laundry in the basket. It's basically what he's expected to do because he's part of the family, like I mow the lawn and DH does the dishes.

He can earn extra money by doing less desirable chores: picking up dog poo, weeding the flower beds, doing the dishes, and matching socks. There's a list on the fridge of what is expected and what is extra so we are all the same page. It adds up to about $ 5 a week.

He can spend his allowance any way he wants, but we discuss how he is spending. He tends to have one fairly expensive toy in mind and is saving for it. So I'll say "Remember if you buy the ice cream from the ice cream truck that's less money saved for xyz." Then we talk about if he still wants it or may be buying the 50 cent popiscle instead the $2 ice cream.

I started the allowance to stem the flood of toys DH buys and the "can you buy me......" I have to confess I pay him 10 cents a night to sleep in his own bed. It's not a chore for him, it's for my convience and 70 cents a week is such a cheap price to pay for a good night of sleep.

[valsblondies]

My ds is 9 and very money aware (or obsessed - whichever you prefer)! We keep 2 charts- one in which he has the opportunity to make money - "chores". He marks a slash off he he does one of chores on the chart. He does not get paid for maintaining his room. Other chores are - garbage,mail, setting table, watching baby brother, laundry.

The quirk to our system is the second chart. He looses money for certain behaviors or failing to do chores when asked. Rather than fight or battle with him when he doesnt do a chore, I simply goto the chart and mark it off. This works very effectively with him where nothing else has.

We are in charge of the money- he isnt permitted to make unauthorized purchases. Most of it is put in an account for something big he has been saving for. He recently bought an ipod that way and is halfway to a new computer. I do allow some frivolous expenditures. My basic rule is no spontaneous purchases. However, if we goto Target and for the 3rd time he really wants that certain toy, I will allow him to purchase it even though its not something I would choose.

He usually makes about $40/month. He also petsits for neighbors often and makes quite a bit that way.

[FireWithin]

My six year oldget 4 dollars a week, no strings attached. Except we do remind him of the few toys he is saving for when he wants to do an impulse purchase. We try to make it pressure free so he can make his own decisions.

We have considered creating extra chores for more money, but we have. Ever made a decision.

[ALittleBitCrunchy]

Our kids are 7 and 5 and they have basic jobs around the house that they do because they are part of the family - cleaning up, setting the table, clearing the table, putting away clothes, bringing dirty clothes downstairs, etc. This stuff is part of life and they make the some money for it that we do - nothing.

Each has their own job that earns them $3 a week. DS is in charge of the dog - he takes him out and brings him in, plays ball with him, keeps his water dish full. He does it on his own and we remind him if he forgets. DD is in charge of her diabetes bag - she keeps the supplies full (syringes, test strips, insulin, meter, glucotabs, lancets, etc) and checks it before we go anywhere. She also does her own bg checks and writes down numbers for us when we are calculating carbs. Again, she does this independently but we do a quick check and remind her if it wasn't done. We wanted them to have 'jobs' that suit them and that are related to them. DS is the dog's favorite human and he gets a taste of responsibility and carrying for living things; DD will be managing her diabetes for a lifetime and this is good exposure. We'll change them around eventually but it works for now.

They also have the opportunity to earn extra money when they are trying to save money to buy something. They ask for a job and we give them options based on what needs done and offer a rate. They pick what they want to do and get paid as they finish.

[konamama]

subbing

[Savoir Faire]

My kids have an allowance. The basic $$ comes from being a part of this family so that they can have their own money, though if they are extremely disobedient (refuse to pick up stuff, make horrid messes beyond normal) they might lose a bit of it. They can also earn extra $$ for doing things around house-- little things such as help load the washer or unload dishes.

We let them spend it how they want...to an extent. My son spent $3 to buy candy. My daughter buys gum. They both went to Target this week and spent all their money on toys and then had a hard lesson when we went to a thrift store and that barbie she bought for $10 only cost $2 there. And she had no money left.

They have been getting cases of the gimmies recently so we may be cutting back on what they can buy. They've also been told that when we go to Disneyland, we will double (or possibly triple) the amount of money they've saved for the trip so that they can buy the trinket they want there.

I found having the allowance has really helped us. It is teaching them to buy their own things, to figure out what they REALLY want and how to look for items on sale or used.

[moominmamma]

Allowance to me is a tool for helping children learn money management. It's a way for them to make small mistakes and learn from them, and to learn from small successes as well. Learning money management is an important lesson.

I don't get paid for doing laundry and sweeping the living room floor. Helping out is what families do. I want my children to learn this lesson too.

The problem with linking chores to allowance is that the second lesson is much less clear. It presents the implicit option of no money for no work, and suggests that chores are done primarily in order to serve your personal consumer desires.

Other problems with linking chores to allowances:

Child receives $35 in birthday cash from relatives and can now afford the video game he's been saving his allowance from. Forget the chores! Is it okay for him to stop clearing his dishes, to refuse to tidy his toys off the living room floor?

Child happens to have a temperament that means he has few material desires and is satisfied with a simple life. The incentive of doing work to satisfy his material desires isn't really effective for him. How will he learn to contribute to the household?

Child is by nature intensely oppositional, impulsive and short-sighted and struggles with doing regular chores. He rarely earns his allowance. How will he learn money management, since he never has any money to manage?

Animal-loving ten-year-old is offered a dog-walking job by a neighbour for $15 a week. She loves this work and is no longer interested in doing any chores for the $6 a week she gets in allowance. Is she justified in ceasing to lift a finger around the house?

So anyway, back to our allowance system. My kids get half their age per week as a financial learning tool. No strings attached. They are asked how much, if any, of that they would like to earmark for longer-term savings or for charitable giving. Nothing is imposed. They're learning to make good decisions. I'm really impressed. Allowance is distributed to each child in a personal ledger (i.e. Bank of Mom), which reduces various spending / pilfering temptations and allows them to see over the long-term what their spending habits have been.

Miranda

[heatherdeg]

Originally Posted by moominmamma

Allowance to me is a tool for helping children learn money management. It's a way for them to make small mistakes and learn from them, and to learn from small successes as well. Learning money management is an important lesson.

I don't get paid for doing laundry and sweeping the living room floor. Helping out is what families do. I want my children to learn this lesson too.

The problem with linking chores to allowance is that the second lesson is much less clear. It presents the implicit option of no money for no work, and suggests that chores are done primarily in order to serve your personal consumer desires.

:

I taught public high school and the "pay to play" nonsense (IOW: "I'm not doing anything that doesn't have a clear reward" attitude) was beyond ridiculous.

I didn't know how to reconcile it until I read "Raising Financially Fit Kids" (thankfully, mine is only 5yo so I only had to read the first 2-3 chapters! ). It totally solved this for me.

So my son is 5yo and gets an allowance for the purpose of learning to manage his money. Period. He has an opportunity to earn extra money for extra special things (or rather, we are open to this if it happens) but there are things he is required to do as part of living in this house. So at 5yo, he is required to dress himself, make his bed, brush his teeth, put his toys away, etc. (stuff that's just part of our daily routines--it probably sounds like we're military, but it's not like that).

We bought him the kids money kit from http://www.kidswealth.com/ The kit has 5 account wallets that he splits his money into. He's 5yo and gets $5/week--$1 in each wallet. Each wallet has a purpose (savings, saving for a big ticket item, educational costs like books or museum trips, fun money and then charity).

The kit comes with parent instructions that help you decide how much to give your kids based on what you spend on them now and what you want them to pay for. So if you have a 15yo and you're spending $20/month on the movies, you'd build that into the child's allowance and now make them responsible for budgeting the money.

The kit also has recommendations for percentages that go into each wallet, but for us--equal distribution works fine for now. And all money he receives gets split up like this--so there's no "Oh, Nonna gave me $20 so now I can go get the Lego kit I've been saving for!" but he can't because only $4 of it goes into that account wallet. (this required training of ds AND Nonna, btw