Allowances and Money training

I've always thought it was a good idea to give our kids an allowance. But I'm not sure how to teach them the responsibility that goes along with it. All we've done is give it to them and not taught them how to manage it, save it, or think about it.


Our 8 year old knows how much money she has, and thinks $20 is a lot of money. We have to work better on splitting their allowance money into categories. Most of the time their allowance is dolled out in $1.00 bills, so the actual splitting into different savings piles is difficult. I'm going to try to make it my goal this month to have the money split before I give it to them, so that we can work with them on saving long term, spending, and giving.


We've not directly tied allowance money to chores because our 8 year old would just give up the money and refuse to do the chores. I want them to do their daily chores because they are part of the family not because we pay them for them. An allowance is to teach them responsibility with money and let them buy things and learn how much they really cost.


I've been using the $.50 per year allocation, so an 8 year old would get $4.00 a week. It adds up quickly when they aren't buying anything! It is hard for me to make them part with some of the money to put in their savings accounts. I know they wouldn't really miss it, but that part of the training is hard for me to deal with. Hmm, maybe I need to look into my own feelings about saving on this one...


Any ideas?

Comments

  1. Paige LoterApril 25, 2009 at 11:34 AM

    I heard an interesting idea for deciding how much a child should get for allowance. Have them make a budget for themselves of what they spend their money on per week, lunch, special treat, any toy or clothing they are saving for, weekend activity, ice cream man, etc. Then go over the budget with them and give them an allowance based on their need rather than an arbitrary amount. Then when they want a raise in their allowance, they can go over their budget with you and show you how lunch is more expensive now or how it costs an extra quarter for their favorite drink at Beanscene and then you can adjust their allowance as needed. It's just another way to make sure your kids are thinking about things. Also, I'd be interested to know what things you require your kids to buy for themselves and what things you buy for them. Will that change as they get older?

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